Forex Market: AUD/USD forecast for Monday

During Friday’s trading session AUD/USD traded within the range of 0.9406-0.9441 and closed at 0.9423, gaining 0.09% for the day and 0.35% for the week.

Fundamental view

Australia

At 0:30 GMT on Monday (June 30th) the University of Melbourne will release its estimate of inflation in Australian economy during June. Annualized inflation estimate for May was 2.9%. In case inflation rate rises, this bolsters the case for an interest rate hike by the Reserve Bank of Australia (RBA), which usually has a bullish effect on the national currency. It is so, because assets, offering higher yields tend to attract more international investors, which will usually increase demand for the domestic currency.

In addition, private sector credit in Australia probably expanded 0.4% in May compared to April, according to the median forecast by experts, following another 0.5% increase in April compared to March. This indicator reflects the ability of nations private sector to afford huge expenditures, which could be a driving force behind economic growth. We can say that the indicator provides clues over general business conditions in the country. In case private sector credit expanded at a more considerable pace than projected, this would boost the Australian dollar. The Reserve Bank of Australia is to release the official data at 1:30 GMT on Monday.

At 23:30 GMT the same day the Australian Industry Group (AIG) is expected to announce the results from its survey on short-term and intermediate-term conditions in the sector of manufacturing in Australia during June. 200 manufacturers provide their assessment of overall business situation in the sector in terms of employment, new orders, output, prices and inventories. The seasonally adjusted Performance of Manufacturing Index (PMI) for Australia came in at a reading of 49.2 in May. Values below the key level of 50.0 are indicative of contraction in activity. An improvement in the value of this indicator would provide a certain support to Australian dollar.

United States

The Chicago Purchasing Managers Index (PMI) probably slowed down to a reading of 63.0 in June from 65.5 during the prior month. The index reflects business conditions in regions manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading above the key level of 50.0 is indicative of expansion in manufacturing activity. In case the PMI exceeded forecasts, this would heighten the appeal of the US dollar. The MNI Deutche Börse Group will release the official reading of the Chicago barometer at 13:45 GMT on Monday.

The index of pending home sales in the United States probably surged 1.2% during May compared to April, according to the median estimate by experts, following another 0.4% increase in April compared to March.

When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale of contract and is currently the most accurate indicator regarding US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.

Although there are some cancellations, there are not enough for the data to be skewed one way or another. The base value of the index is equal to 100, while the base year is 2001, when there has been a high level of home sales. The National Association of Realtor’s (NAR) will release the official index value at 14:00 GMT on Monday. In case pending home sales increased more than anticipated, this would have a bullish effect on the greenback.

Technical view

According to Binary Tribune’s daily analysis, in case AUD/USD manages to breach the first resistance level at 0.9440, it will probably continue up to test 0.9458. In case the second key resistance is broken, the pair will probably attempt to advance to 0.9476.

If AUD/USD manages to breach the first key support at 0.9405, it will probably continue to slide and test 0.9388. With this second key support broken, the movement to the downside will probably continue to 0.9371.