AUDUSD Weekly View

08/01/2014

AUDUSD Weekly 

AUSSIE was unable to stop the Downward pressure in December and headed for a new low by the end of last year and wave C should head lower towards 0.8066 and 0.8311 travelling the same distance between wave X and A

AUDUSD started off the new year on a positive note, gaining close to a cent last week. The pair closed the week at 0.8944. There are three key events this week – Trade Balance, Retail Sales and Building Approvals. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

The US bounced posted strong Unemployment Claims and Fed chair Bernard Bernanke stated that the economy continues to recover. This gave risk takers more confidence to move away from the safe-haven greenback and the riskier Aussie showed gains.

Updates:

1. Trade Balance: Tuesday, 00:30. This is the first key event of the week. Trade Balance is directly linked to currency demand, as foreigners need to purchase Australian dollars in order to buy the country’s exports. Australia continues to post monthly trade deficits, and the November figure of -0.53 billion dollars was much higher than the estimate of -0.38 billion. The markets are expecting an improvement in December, with the estimate standing at -0.30 billion.
2. AIG Construction Index: Tuesday, 22:30. The index continues to climb higher and November’s reading reached an impressive 55.2 points. Will the upward trend continue in December?

Elliot wave Count 

1. Building Approvals: Thursday, 00:30. Building Approvals tends to show sharp movement, making accurate forecasts a tricky task. After a sparkling 14.4% gain in October, the indicator slumped in November, posting a decline of 1.8%. However, this was well above the estimate of -4.3%.  The markets are  expecting another decline in the upcoming release, with an estimate of -0.9%.
2. Retail Sales: Thursday, 00:30. Retail Sales is a market-mover, so analysts will be carefully monitoring this key consumer spending event. The indicator posted a gain of 0.5% in December, edging above the estimate of 0.4%. The estimate for December stands at 0.5%.
3. Chinese CPI: Thursday, 1:30. The Australian dollar is sensitive to key Chinese events such as CPI, as China is Australia’s number one trading partner. Chinese CPI has not been below the 3% level since September, but the markets are expecting a weaker figure in December, with the estimate standing at 2.7%.
4. HIA New Home Sales: Friday, Tentative. This indicator tends to show strong fluctuations, and posted a decline of 3.8% in November after two straight gains. The markets will be hoping for a turnaround in the December release.
5. Chinese Trade Balance: Friday, Tentative. Chinese Trade Balance has looked strong, and the November reading came in at 33.8 billion dollars, crushing the estimate of 2.13 billion. The forecast for the December release is expected to show a slight drop, with an  estimate of 32.6 billion.

News update from Forex crunch