It was another busy week for AUD/USD, which sustained losses of over 1%. This marked the pair’s worst week since June. The upcoming week has five events, including business and consumer sentiment. Here is an outlook at the highlights and an updated technical analysis for AUD/USD.

It was an unusually busy week in Australia. The Melbourne Institute inflation gauge slowed to 0.1%, down from 0.9%. Company earnings were much stronger than expected, with a gain of 15.0%. The estimate stood at -6.0%. Australia’s current account surplus jumped to A$17.7 billion, up sharply from A$8.4 billion. As expected, the RBA held rates at 0.25%, where they have been pegged since March. The economy contracted by some 7.0% in Q2, marking the worst quarter on record, as the coronavirus hampered business activity. With GDP falling for a second straight quarter, the country is officially in a recession. Still, retail sales were solid in July with a gain of 3.2%, down a bit from 3.3%.

In the US, Manufacturing PMI improved to 56.0. up from 54.2. The Services PMI also pointed to expansion, but slowed to 56.9, down from 58.1 beforehand. Unemployment claims dropped below the 1-million mark with a reading of 886,000. Nonfarm payrolls slowed to 1.371 million, but was very close to the estimate of 1.374 million. The unemployment rate fell sharply to 8.4%, down from 10.2%. This marked the first single-digit reading since April, prior to the Corvid-19 pandemic. There was more good news from wage growth, which rose from 02% to 0.4%.

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

1. AIG Services Index: Monday, 22:30. The index improved to 44.0 in July, up from 31.5. Still, the indicator has been stuck below the 50-level, which points to contraction, since November 2019. Will we see another improvement in August?
2. ANZ Job Advertisements: Monday, 1:30. The Australia and New Zealand Banking Group employment indicator enjoyed a strong month in July, with a gain of 16.7%. Will we see another gain in the August data?
3. NAB Business Confidence: Tuesday, 1:30. The National Australia Bank index disappointed in July, falling from 1 to -14, as business confidence sagged badly. The index has managed only one gain in the past eight months. We now await the upcoming release.
4. Westpac Consumer Sentiment: Wednesday, 00:30. Consumer sentiment has also fallen, with a reading of -9.5% in August, after a read of -6.1% a month earlier. Will the September release bring better news?
5. MI Inflation Expectations: Thursday, 1:00. The Melbourne Institute inflation report is useful for tracking inflation, as inflation expectations often translate into actual inflation. The index has been steady in recent months and inched higher to 3.3%, up from 3.2%. We now await the August data.

AUD/USD Technical Analysis

Technical lines from top to bottom:

We start with resistance at 0.7595.

0.7513 has held since June 2018.

The round number of 0.74 (mentioned last week) is next.

0.7294 is an immediate resistance line.

0.7173 is the first line of support.

0.7087 is next.

0.7008, which is protecting the symbolic 0.7000 line is the final support level for now.

.I am bearish on AUD/USD

The US dollar is looking a bit healthier, as the US economy shows signs of recovery. This could renew confidence in the greenback, and that could mean a bumpy road for risk currencies like the Aussie.