AUD/USD Weekly Fundamental Analysis May 7 – 11, 2012, Forecast

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Introduction:  The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors

Weekly Analysis and Recommendation:

The AUD/USD ended the week at 1.0180 plummeting on negative comments from the RBA and a revision in growth forecast.

Highest: 1.0461

Lowest: 1.0170

Difference: 0.0291

Average: 1.0302

Change %: -2.33

This week the RBA announced a reduction in their growth forecast for 2012, stating that problems for the eurozone and exports as well as higher inflation are limiting growth in Australia.

This coupled with the .50bp rate reduction earlier in the week has caused the weakness in the AUD.

Also this week Australian inflation rose 0.3% in April, according to the TD Securities – Melbourne Institute monthly inflation gauge.. That was lower than a 0.5% increased recorded by the survey in March.

Homes sales weakest in more than a decade –Inflation gauge suggest RBA clear to cut rates –Housing credit remains subdued in March

Major Economic Events for the past week actual v. forecast

 

AUD

 

 

Interest Rate Decision 

3.75%

 

4.00% 

 

4.25% 

 

 

 

USD

 

 

ISM Manufacturing Index 

54.8

 

53.0 

 

53.4 

 

 

 

USD

 

 

ADP Nonfarm Employment Change 

119K

 

177K 

 

201K 

   

 

NZD

 

 

Unemployment Rate 

6.7%

 

6.3% 

 

6.4% 

   

 

EUR

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

 

 

 

USD

 

 

Initial Jobless Claims 

365K

 

380K 

 

392K 

   

 

USD

 

 

Nonfarm Payrolls 

115K

 

170K 

 

154K 

   

 

USD

 

 

Unemployment Rate 

8.1%

 

8.2% 

 

8.2% 

 

 

 

CAD

 

 

Ivey PMI 

52.7

 

61.0 

 

63.5

   

 

Economic Highlights of the coming week that affect the AUD,JPY, NZD and USD

May 7

1:30

AUD

 

Building Approvals m/m

   

-7.8%

1:30

AUD

 

Retail Sales m/m

   

0.2%

May 8

1:30

AUD

 

Trade Balance

   

-0.48B

9:30

AUD

 

Annual Budget Release

     

21:00

NZD

 

RBNZ Financial Stability Report

     

May 9

23:50

JPY

 

Current Account

   

0.85T

May 10

1:30

AUD

 

Unemployment Rate

   

5.2%

TBD

CNY

 

Trade Balance

   

5.4B

12:30

USD

 

Trade Balance

   

-46.0B

12:30

USD

 

Unemployment Claims

   

365K

May 11

1:30

CNY

 

CPI y/y

   

3.6%

12:30

USD

 

PPI m/m

   

0.0%

13:55

USD

 

Prelim UoM Consumer Sentiment

   

76.4

Upcoming Government Bond Auctions

Date  Time  Country 

May 08  09:15  Austria 

May 08  09:30  Belgium 

May 08  14:30  UK 

May 08  15:30  Italy  

May 08  17:00  US 

May 09  09:10  Sweden 

May 09  09:30  Germany 

May 09  09:30  Swiss 

May 09  09:30  UK 

May 09  14:30  Sweden 

May 09  15:30  Italy  

May 09  17:00  US 

May 10  15:00  US 

May 10  17:00  US 

May 11  09:10  Italy   BOT auction

May 11  10:00  Belgium

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