It was a mostly uneventful week for the Australian dollar, which remained unchanged. There are just two Australian events on the schedule. The U.S. will release Final GDP for the fourth quarter. Here is an outlook for the highlights of this week and an updated technical analysis for AUD/USD.

The RBA has maintained interest rate levels, but the economy is under pressure, and analysts are talking about a rate cut if things don’t improve soon. The economy created 4.6 thousand jobs, well below the forecast of 14.8 thousand. The unemployment rate dipped to 4.9%, below the estimate of 5.0%.

A pessimistic message from the Federal Reserve policy meeting caught the markets off guard and briefly pushed the greenback lower. The Fed’s rate outlook indicated that a majority of policymakers expected rates to stay on hold until 2020, and the rate statement stated that economic activity “has slowed”. As well, the Fed also announced that it would stop reducing its $4 trillion balance sheet by $50 billion a month. This move is a loosening of policy and is intended to stimulate the economy. There was no relief from the Fed economic forecast, which lowered its GDP estimate to 2.1%, down from 2.3% in December.

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

1. CB Leading Index: Wednesday, 14:30.  The Conference Board’s composite index is comprised of seven separate economic gauges. The index posted a weak gain of 0.1% in January, pointing to sluggish economic growth.
2. Private Sector Credit: Friday, 00:30. Consumer credit levels have dipped, falling to 0.2% for the past two months. This was short of the forecasts of 0.3%. Weaker credit levels is an indication of less spending, which is bad news for the Australian economy. Another weak gain of 0.2% is projected in the upcoming release.

*All times are GMT

AUD/USD Technical Analysis

AUD/USD showed limited movement, as 0.7085 (mentioned last week) remained relevant throughout the week.

Technical lines from top to bottom:

We start with the round number of 0.74, the high point reached at the wake of December. This is followed by 0.7340, which the pair breached in late November.

0.7315 was a swing high seen in late September. Further down, 0.7240 separated ranges in September and in October. 0.7190 marked a low point in the first week of December.

Lower, 0.7165 was a swing low after a recovery in mid-November. 0.7085 was a low point in September and remained relevant during the week.

Close by, 0.6970 played a role back in January 2017.

Below, 0.6825 supported the pair in late 2016 and early 2017.

0.6744 was a low point in January.

0.6686 was an important cap back in January 2000. It is the final support line for now.

I am bearish on AUD/USD

The Australian economy has been damaged by the global trade war, and the slowdown in China has weighed heavily on the Australian economy. If the trade war continues, traders can expect the Aussie to continue to struggle.