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Forex - AUD/USD weekly outlook: April 15 - 19

ForexApr 14, 2013 08:26AM ET
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Investing.com - The Australian dollar retreated from a 13-week high against its U.S. counterpart on Friday, as downbeat U.S. economic data sparked fears over the outlook for growth in the world’s largest economy, bolstering safe haven demand.

AUD/USD hit 1.0581 on Thursday, the pair’s highest since January 11; the pair subsequently consolidated at 1.0503 by close of trade, still holding to a gain of 1.16% for the week.

The pair is likely to find support at 1.0478, Friday’s low and resistance at 1.0581, Thursday’s high.

The U.S. Commerce Department said in a report Friday that retail sales fell 0.4% in March, the largest decline in nine months and missing expectations for a 0.1% increase.

A separate report showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 72.3 in April, the lowest level since July, from a final reading of 78.6 in March.

Earlier in the week, the minutes of the Federal Reserve’s March meeting showed that several policymakers favored an early end to the bank’s asset purchase program.

The Fed minutes, which were inadvertently released ahead of schedule, showed that that a few policymakers saw quantitative easing tapering around midyear, while several others believed it would be appropriate to slow later in the year and to stop by the end of the year.

However, the impact of the minutes was muted as the meeting was held before nonfarm payrolls data showed that the U.S. economy added far fewer than expected jobs in March.

Meanwhile, disappointing jobs data out of Australia also weighed on demand for the Aussie. The Australian Bureau of Statistics said Thursday the economy lost 36,100 jobs in March, far more than the expected 5,000 decline, after 74,000 jobs were created the previous month.

The report added that Australia's unemployment rate ticked up unexpectedly to 5.6% last month, from 5.4% in February. Analysts had expected the unemployment rate to remain unchanged.

In the coming week, the U.S. is to publish a broad range of economic data, with reports on manufacturing activity, the housing sector and inflation due for release. Investors will be closely watching this data as they attempt to gauge the strength of the U.S. recovery.

In addition, investors will be looking ahead to the release of the minutes from the Reserve Bank of Australia’s most recent policy-setting meeting for further hints on the future of its monetary policy.

Market participants will also be watching a flurry of Chinese economic reports due this week to gauge the strength of the world’s second largest economy and a key trading partner of the Pacific nation.

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 Wednesday and Friday, as there are no relevant events on these days.

Monday, April 15

China is to release official data on first quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. Beijing is also to release government data on retail sales, industrial production and fixed asset investment.

Australia is to produce official data on home loans, a leading indicator of demand in the housing market.

The U.S. is to publish data on manufacturing activity in New York state, a leading economic indicator.

Tuesday, April 16

The Reserve Bank of Australia is to release the minutes of its most recent policy setting meeting, which contain important insights into economic conditions from the bank’s perspective.

The U.S. is to publish official data on building permits, an excellent indicator of future construction activity and on housing starts. The U.S. is also to release data on consumer inflation, industrial production and the capacity utilization rate.

Thursday, April 18

The National Australia Bank is to publish its quarterly report on business confidence, a leading economic indicator.

The U.S. is to release the weekly government report on initial jobless claims as well as data on manufacturing activity in Philadelphia.

Forex - AUD/USD weekly outlook: April 15 - 19

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