AUD/USD Forecast Jan. 28 - Feb. 1 – U.S. Shutdown Reprieve Boosts Aussie

The Australian dollar recorded slight gains last week, as the currency surged on Friday. The upcoming week’s key event is Australian CPI. Here is an outlook for the highlights of this week and an updated technical analysis for AUD/USD.

In a surprise development on Friday, President Trump agreed to reopen government services which had been closed for a three-week period. This sent the U.S. dollar broadly lower, and boosted the Australian dollar.

The U.S-China trade war remains a significant concern for the Australian economy, with the U.S. threatening more tariffs in March 1. Chinese officials will be in Washington this week to conduct a second round of trade talks, and any signs of progress would be good news for the Aussie.

Australian employment data was strong last week. The economy created 21.6 thousand jobs, beating expectations. The unemployment rate dipped to 5.0%, down from 5.1%.

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

  1. NAB Business Confidence: Tuesday, 00:30. This National Australia Bank survey continues to head lower, as the reading of 3 in November was the weakest since May 2016. The slowdown in China could continue to way on business sentiment.
  2. CPI: Wednesday, 00:30. CPI is the primary gauge of consumer spending. CPI has posted modest gains of 0.4% for three successive quarters, and the same gain is expected in Q4. Trimmed Mean CPI, which excludes the most volatile items, is also forecast to post a 0.4% gain.
  3. Import Prices: Thursday, 00:30. Prices of imported goods feed into consumer prices. The quarterly figure climbed by 1.9% in Q3.A modest increase of 0.3% is the forecast for Q4. The number does not have a very significant impact on markets after the CPI was already published.
  4. Private Sector Credit: Thursday, 00:30. The indicator dipped to 0.3% in December, its lowest level since July. Another gain of 0.3% is expected in January.
  5. AIG Manufacturing Index: Thursday, 21:30. The Chinese slowdown has weighed on the manufacturing index, which indicated contraction in December, with a score of 49.5 points. Will the indicator rebound into expansion territory in January?
  6. PPI: Friday, 00:30. This inflation indicator suprised in Q3 with a strong gain of 0.8%. This marked the sharpest gain since Q3 of 2015. Will we see another sharp gain in Q4?
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