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AUD/USD Weekly Fundamental Analysis, August 3 – August 7, 2015 Forecast

By:
James Hyerczyk
Updated: Aug 1, 2015, 21:48 UTC

Weekly Analysis and Recommendation:  The AUD/USD ended the week with a potentially bullish closing price reversal bottom. The chart pattern doesn’t mean

AUD/USD Weekly Fundamental Analysis, August 3 – August 7, 2015 Forecast

AUDUSD
Weekly Analysis and Recommendation: 

The AUD/USD ended the week with a potentially bullish closing price reversal bottom. The chart pattern doesn’t mean the trend is getting ready to turn up, but may simply indicate the market ran out of sellers after this prolonged move down in terms of price and time.

Profit-taking and short-covering after the release of the Fed statement on July 29 and ahead of this week’s Reserve Bank of Australia monetary policy statement were likely the catalysts behind the reversal.

On Tuesday, August 4, the RBA is expected to leave its benchmark interest rate at 2.00%. However, the statement may contain language which suggests the central bank may implement two additional rate cuts before the end of the year. Even if the central bank refrains from a rate hike, dovish guidance could put pressure on the market.

Low commodity prices and a sluggish Chinese economy are two factors weighing on the Australian Dollar. However, the major reason why this Forex pair is likely to continue to weaken over the long-term is the interest rate differential between Australian and U.S bonds as well as the divergence between Fed and RBA monetary policies.

One can build a bullish scenario this week if the RBA statement is on the hawkish side. This means that if it eliminates the threat of additional rate cuts. Friday’s U.S. Non-Farm Payrolls report will also influence the price action. Traders are pricing in an increase of 224K new jobs in July. A miss to the downside may take a September rate hike by the Fed off the table. This news will trigger a short-covering rally by the AUD/USD. A bigger-than-expected number will likely trigger the resumption of the down trend.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

 

Weekly AUDUSD

Important Reports to Watch this Week

       Date                        Time                Curr                                Event                                                           Forecast  Previous                                                                      

Mon Aug 3

 10:00am ET

USD

 

ISM Manufacturing PMI

   

53.6

53.5

 
 

9:30pm ET

AUD

 

Retail Sales m/m

   

0.5%

0.3%

 
   

AUD

 

Trade Balance

   

-3.06B

-2.75B

 

Tue Aug 4

12:30am ET

AUD

 

Cash Rate

   

2.00%

2.00%

 
   

AUD

 

RBA Rate Statement

         

Wed Aug 5

8:15am ET

USD

 

ADP Non-Farm Employment Change

   

218K

237K

 
 

8:30am ET

USD

 

Trade Balance

   

-42.6B

-41.9B

 
 

10:00am ET

USD

 

ISM Non-Manufacturing PMI

   

56.4

56.0

 
 

9:30pm ET

AUD

 

Employment Change

   

12.5K

7.3K

 
   

AUD

 

Unemployment Rate

   

6.1%

6.0%

 

Thu Aug 6

8:30am ET

USD

 

Unemployment Claims

   

269K

267K

 
 

9:30pm ET

AUD

 

RBA Monetary Policy Statement

         

Fri Aug 7

8:30am ET

USD

 

Non-Farm Employment Change

   

224K

223K

 
   

USD

 

Unemployment Rate

   

5.3%

5.3%

 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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