Forex Market: AUD/USD trading outlook for December 7th

Friday’s trade saw AUD/USD within the range of 0.7274-0.7388. The pair closed at 0.7341, inching up 0.01% on a daily basis, while marking a second straight trading day of gains. The daily high has been the highest level since August 18th, when a high of 0.7389 was registered. In weekly terms, AUD/USD appreciated 2.03% during the current week, or the most since the week ended on October 11th, when it surged 4.09%. The pair has risen 1.56% so far during the current month.

On Monday (December 7th) AUD/USD trading may be influenced by a number of macroeconomic reports as listed below.

Fundamentals

Australia

AiG Performance of Construction Index

At 22:30 GMT on Sunday 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 construction during November. Surveyed companies answer questions associated with production, employment, prices, supplier deliveries, inventories and new orders. The seasonally adjusted Performance of Construction Index (PCI) for Australia came in at a reading of 52.1 in October, which marked the third consecutive month, when the gauge inhabited the area above 50.0. Values above that key level are indicative of predominant optimism (expansion in activity). An improvement in the value of this indicator would provide a limited support to Australian dollar.

ANZ Job Advertisements

At 0:30 GMT on Monday the Australia and New Zealand Banking Group (ANZ) will publish data regarding the number of job advertisements in Australia in November. It encompasses advertisements in the major metropolitan newspapers and on the Internet sites. The corresponding index, based on a survey by ANZ, climbed 0.4% in October compared to September, marking a third consecutive month of increases. In September job advertisements were 3.9% more compared to a month ago. This indicator is used for projecting growth in employment in Australia, as it reflects labor market conditions in the future. An increase in the number of jobs would have a limited bullish effect on the Australian dollar, while a decrease would have the opposite effect.

United States

Change in consumer credit

The money amounts, borrowed by consumers probably increased by USD 20.0 billion in October, according to market expectations, following a surge by USD 28.92 billion in September. The latter was mostly supported by non-revolving credit (auto and student loans), which rose by USD 22.23 billion. In addition, revolving credit (credit cards mostly), grew by USD 6.69 billion in September.

Given the current state of the economy, a higher-than-expected amount borrowed is usually considered as dollar positive, as it implies a potential increase in consumer spending and accelerated growth, respectively. The Board of Governors of the Federal Reserve is to release the official numbers at 20:00 GMT.

Correlation with other Majors

Taking into account the week ended on December 6th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.8897, or very strong)
AUD/USD to EUR/USD (0.7266, or strong)
AUD/USD to GBP/USD (0.3596, or moderate)
AUD/USD to USD/CAD (-0.1695, or weak)
AUD/USD to USD/JPY (-0.3430, or moderate)
AUD/USD to USD/CHF (-0.7139, or strong)

1. During the examined period AUD/USD moved strongly in one and the same direction with EUR/USD, while moving strongly in the opposite direction compared to USD/CHF.

2. AUD/USD moved almost equally in one and the same direction with NZD/USD during the week.

3. The correlation between AUD/USD and USD/CAD was insignificant during the period in question.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7334
R1 – 0.7395
R2 – 0.7448
R3 – 0.7509

S1 – 0.7281
S2 – 0.7220
S3 – 0.7167

By using the traditional method of calculation again, the weekly pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7299
R1 – 0.7430
R2 – 0.7519
R3 – 0.7650

S1 – 0.7210
S2 – 0.7079
S3 – 0.6990