AUD/USD Weekly Forecast Dec. 26-30, 2011, Fundamental Analysis

The AUD/USD pair advanced last week to cover its previous losses, where the US dollar lost ground against most of its major counterparts due to risk appetite that returned gradually to the financial market.

Investors are trying to take profits and close most of their positions before the year ends and the start of the holidays this week, which drove the US dollar down against majors.

However, the main trend in the market is still for further gains for safer assets such as the yen and the greenback, and this current break does not mean that the financial market broke free of persisting problems and disasters, as the escalating debt crisis did not show any clear signs of resolution.

Narrow range trading is mostly expected for the AUD/USD pair during this week, as the volume will be at its lowest due to the holidays which will drag investors out of the market.

On the other hand, the Australian economy will not release any fundamental during this week, where the current market sentiment will control movements in the market.

Major highlights for this week that will affect the AUD/USD pair’s trading:

Monday December 26:

Christmas Monday, markets closed.

Tuesday December 27:

On Tuesday at 15:00 GMT, the U.S. economy will release the Consumer Confidence for December, where it’s expected to rise to 58.5 from the previous reading of 56.0.

Wednesday December 28:

On Wednesday, both economics will not issue any fundamental, where the pair’s movement will depend on the market sentiment.

Thursday December 29:

On Thursday at 13:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance dropped to 364 thousand last week.

TheU.S.economy will issue the Chicago Purchasing Manager for December at 14:45 GMT, where the prior reading was 62.6 and it’s expected to come at 60.2.

At 15:00 GMT, Pending Home Sales for November will be and expected with 1.8% rise after 10.4%.

Friday December 30:

On Friday, both economics will not issue any fundamental, where the pair’s movement will depend on the market sentiment.