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Forex - AUD/USD weekly outlook: May 26 - 30

Published 05/25/2014, 08:27 AM
AUD/USD ends the week with a loss of 1.43%

Investing.com - The Australian dollar ended Friday’s session near a three-week low against its U.S. counterpart, after better than expected data on new home sales in the U.S. added to signs of a recovery in the housing market.

AUD/USD hit 0.9207 on Wednesday, the pair’s lowest since May 2, before subsequently consolidating at 0.9231 by close of trade on Friday, 0.04% higher for the day but down 1.43% for the week.

The pair is likely to find support at 0.9207, the low from May 21 and resistance at 0.9272, the high from May 22.

The Commerce Department reported that sales of new homes rose by a larger-than-expected 6.4% to 433,000 in April, after two months of decline. Analysts had been expecting a figure of 425,000. March's number was revised up from 384,000 to 407,000.

The upbeat data added to signs of a recovery in the housing market and bolstered the outlook for the broader economic recovery.

Meanwhile, in Australia, minutes of the Reserve Bank’s May meeting published earlier in the week indicated that rates are likely to remain on hold for an extended period.

Sentiment also remained shaky after ratings agency Standard & Poor’s warned that Australia’s coveted AAA-rating was at risk unless substantial cuts were made to the budget.

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending May 20.

Net longs totaled 19,462 contracts, compared to net longs of 17,127 in the preceding week.

In the week ahead, U.S. markets will remain closed on Monday for the Memorial Day holiday. Revised data on U.S. first quarter growth and reports on U.S. consumer confidence will be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 26

U.S. markets will be closed for the Memorial Day holiday.

Tuesday, May 27

The U.S. is to produce data on durable goods orders, house price inflation and consumer confidence.

Wednesday, May 28

Australia is to produce a report on completed construction work.

Thursday, May 29

Australia is to publish data on private capital expenditure.

The U.S. is to release revised data on first quarter GDP, as well as the weekly government report on initial jobless claims and data on pending home sales.

Friday, May 30

The U.S. is to round up the week with a report on personal income and expenditure and revised data from the University of Michigan on consumer sentiment.

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