Forex Market: outlook for AUD/USD during the upcoming week

Australian dollar came off four-month highs against its US rival and preserved daily losses during late US session on Friday, after data made it clear that personal spending in the United States rose in February by the most in three months while personal income increased, adding to evidence that nations economy was gaining momentum after the unusually severe winter.

Having touched its highest level since November 21st at 0.9295 at 2:00 GMT, AUD/USD closed at 0.9248 on trading Friday, losing 0.10% for the day. On the other hand, the pair advanced 1.83% during the week. Support was likely to be received at March 27th low, 0.9216, while resistance was to be met at psychological level of 0.9300.

Personal spending in the United States rose 0.3% last month, in line with analysts’ estimates and following a revised down 0.2% increase during the prior month from a 0.4% gain previously. Personal income increased 0.3% in February, again meeting analysts’ expectations and matching January’s gain, data by the US Commerce Department showed yesterday.

The US citizens were trying to shrug off the effects of the inclement weather as they rushed out to shop, supported by improving labor market conditions.

Earlier on Friday the Aussie advanced to the strongest level since November against the US dollar after Chinese Premier Li Keqiang said his country cannot ignore “difficulties and risks” from a slowdown in the economy and that China is ready to deal with any economic volatility that occurs this year. He also added policy makers are confident that growth will fluctuate in a reasonable range. The Australian currency is sensitive to news coming out from China, as the latter is Australias largest export partner.

During the week ahead investors attention will be focused on the US report on non-farm payrolls in March.

AUD/USD may be influenced also by a number of reports/events, that are scheduled during the upcoming week as follows:

On Monday (March 31st) the Housing Industry Association (HIA) is to release data regarding Australian new home sales during February. It will be followed by a report on private sector lending also in February.

At 13:45 GMT the United States will report on business activity in the region of Chicago during March.

On Tuesday (April 1st) the Australian Industry Group (AIG) will release data regarding Australian Performance of Manufacturing Index in March.

At 3:30 GMT the Reserve Bank of Australia is expected to announce its decision on interest rates, followed by a policy statement.

At 14:00 GMT the Institute for Supply Management (ISM) will report on its manufacturing PMI for the United States during March.

On Wednesday (April 2nd) Australia is to report on the number of building approvals in February.

At 12:15 GMT Automatic Data Processing Inc. (ADP) will release data regarding the change in private sector employment in the United States during March.

At 14:00 GMT the United States is expected to report on factory orders in February, a vital indicator for overall production activity in the country.

On Thursday (April 3rd) the Australian Industry Group (AIG) will report on activity in Australian sector of services in March. This will be followed by a report on retail sales, which represent a major part of consumer spending in the country, and also data regarding nations trade balance in February.

The United States is to release its weekly report on initial jobless claims during the week ended on March 23rd, accompanied by a report on nations trade balance in February.

At 14:00 GMT the Institute for Supply Management (ISM) is to announce the reading of its non-manufacturing composite index for the United States in March.

On Friday (April 4th) the United States will release the keenly anticipated report on the change in non-farm payrolls as well as the rate of unemployment during March.