Forex - AUD/USD weekly outlook: November 24 - 28

Investing.com - The Australian dollar advanced against its U.S. counterpart on Friday, after China’s central bank unexpectedly cut interest rates for the first time in more than two years, boosting appetite for growth-linked currencies.

AUD/USD hit a daily high of 0.8723 on Friday, before subsequently consolidating at 0.8672 by close of trade, up 0.61% for the day.

The pair is likely to find support at 0.8565, the low from November 20, and resistance at 0.8745, the high from November 18.

The Aussie was boosted by news that the People's Bank of China cut its benchmark one-year deposit rate by 25 basis points to 2.75% and trimmed its one-year lending rate by 40 basis points to 5.6%.

The move came in response to recent signs of a slowdown in the world’s second-largest economy.

China is Australia's largest trader partner.

Despite Friday's upbeat performance, AUD/USD still lost 0.99% on the week amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.

In contrast, minutes of the Reserve Bank of Australia’s November meeting released earlier in the week indicated that rates were likely to remain on hold for some time to come.

Elsewhere, the euro fell sharply against the Australian dollar on Friday after European Central Bank President Mario Draghi indicated that the central bank is moving closer to quantitative easing

EUR/AUD tumbled 1.76% to 1.4292 in late trade on Friday after Draghi reiterated that the ECB is ready to expand its stimulus program to raise inflation and inflation expectations as quickly as possible.

Draghi also warned about weak growth in the euro zone, saying that no improvements are expected in the coming months.

The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.

In the week ahead, the U.S. is to release a string of economic reports on Wednesday ahead of Thursday’s Thanksgiving holiday, including data on unemployment claims and durable goods orders.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Friday, as there are no relevant events on these days.

Tuesday, November 25

The U.S. is to release revised data on third quarter gross domestic product and a report on consumer confidence.

Wednesday, November 26

The U.S. is to release a flurry of data ahead of Thursday’s holiday, including reports on durable goods orders, unemployment claims, personal income and spending, as well as reports on new and pending home sales and revised data on consumer sentiment.

Thursday, November 27

Australia is to release data on private capital expenditure.

Markets in the U.S. are to remain closed for the Thanksgiving Holiday.