AUD/USD Forecast March 6-10

AUD/USD gained 70 points last week, closing just below the 0.76 level. This week’s key event are Retail Sales and the Cash Rate. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

In the US, Donald Trump’s speech disappointed the markets, but expectations of a March rate hike boosted the greenback. Hawkish comments from Dudley and then from Brainard have sharply raised expectations of a March hike.

Updates

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

MI Inflation Gauge: Monday, 00:00. This monthly indicator helps predict CPI, which is only released each quarter. In January, the indicator edged up to 0.6%, its highest level since June.

Retail Sales: Monday, 00:30. Retail Sales is the primary gauge of consumer spending. The indicator surprised the markets with a decline in December, dropping 0.1%. This was well below the forecast of +0.3%. Better news is expected in January, with an estimate of 0.4%.

AIG Construction Index: Monday, 22:30. The index has posted four straight readings below the 50-point level, indicative of ongoing contraction. However, the indicator has been moving higher and improved to 47.7 in January. Will the upward trend continue in the February report?

Cash Rate: Tuesday, 3:30. The benchmark rate is expected to remain at 1.50%, where it has been pegged since August 2016. The markets will be keeping a close eye on the rate statement, which should be treated as a market-mover.

Chinese Trade Balance: Wednesday, Tentative. China is Australia’s number one trading partner, so key Chinese indicators can have a strong impact on the movement of the Australian dollar. In January, the trade surplus jumped to $355 billion, easily beating the forecast of $295 billion. The markets are braced for a much softer reading in February, with an estimate of $173 billion.

Chinese CPI: Thursday, 1:30. CPI jumped to 2.5% in January, edging above the forecast of 2.4%. The index is expected to soften in February to 1.9%.

Home Loans: Friday, 00:30. Home Loans fell to 0.4% in December, short of the forecast of 1.0%. The market is expecting a downturn in January, with an estimate of -0.9%.