AUD Weekly Forecast (Mar. 2 – 6)

AUD Weekly Forecast (Mar. 2 – 6)

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AUD was sold heavily on COVID-19 concerns last week. Can this week’s parade of top-tier economic releases change the tides for the comdoll?

Here’s a list of potential catalysts you should pay attention to:

RBA’s policy statement (Mar 3, 3:30 am GMT)

  • The Reserve Bank of Australia (RBA) kept its rates steady at 0.75% as expected
  • RBA seemed to want to wait for the impact of its latest rate cuts before making any more moves
  • RBA also noted that bushfires and coronavirus influences will only temporarily weigh on growth, and that consumption, infrastructure spending, and residential construction are expected to pick up
  • The not-so-dovish RBA statement helped propel AUD to an intraday uptrend and its intraweek highs
  • Analysts see the RBA maintaining its policies steady for another month in March
  • Watch out for changes in tone on the COVID-19 outbreak and its impact on global trade activity

Quarterly GDP (Mar 4, 12:30 am GMT)

  • Australia’s economy grew by 0.4% in Q3 2019, slower than the 0.6% uptick seen in Q2 and the expected 0.5% increase. Meanwhile, annualized growth inched higher from 1.6% to 1.7%
  • Turned out, government spending and household consumption increased at their slowest paces since the global financial crisis
  • AUD dipped on the disappointing GDP headlines but soon found intraday bottoms when China printed better-than-expected manufacturing and services PMIs
  • Markets see the quarterly growth remaining at 0.4%, while annualized growth could speed up to 2.0%

Trade balance (Mar 5, 12:30 am GMT)

  • Trade surplus narrowed from 5.51B AUD to 5.22B AUD in December, as exports grew by 1.0% while imports increased at a faster 2.0%
  • AUD ticked lower at the report but news of a British scientist having a breakthrough on a coronavirus vaccine inspired buying of high-yielding bets like the Aussie
  • Trade surplus is expected to narrow further to 4.8B AUD in January
  Chart Art: Potential Support Plays on USD/CAD and NZD/JPY

Retail sales (Mar 6, 12:30 am GMT)

  • Retail activity dropped by 0.5% in December, the largest decline since August 2017
  • AUD didn’t see a lot of selling following the news thanks to updates of a breakthrough on a coronavirus vaccine
  • Traders see retail trading stagnating in January

China’s Caixin PMIs

  • China’s manufacturing PMI (Mar 2, 1:45 am GMT) could slow down from 51.1 to 46.3 in February
  • Caixin’s services PMI (Mar 4, 1;45 am GMT) might weaken from 51.8 to 48.0 for the month

Market risk sentiment

  • Updates on new Coronavirus cases and their impact on global economic activity will continue to affect the demand for high-yielding currencies like AUD
  • It’s also U.S. NFP week, which could direct focus on USD’s overall trends and retracements
  • Economic events, such as PMI releases from other major economies, OPEC meeting, and central banker statements can also influence AUD’s intraweek trends

Technical snapshot

  • Bollinger Bands are signalling AUD’s “oversold” conditions against CHF, JPY, and EUR on the daily time frame
  • Daily Keltner Channels are pointing at AUD’s “oversold” status against CHF, JPY, USD, and EUR

  • AUD has been most volatile against JPY, CHF, GBP, and EUR in the last 30 days

Missed last week’s price action? Read AUD’s price recap for February 24 – 28!

CLICK THE FOLLOWING LINK AND READ AGAIN.

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