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Forex - AUD/USD weekly outlook: May 24-28

Published 05/23/2010, 07:00 AM
AUD/USD
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Investing.com – The Australian dollar plunged to a 10-month low against its U.S. counterpart last week on fears over the effects of harsh fiscal tightening in Europe.

AUD/USD hit 0.8071 on Thursday, its lowest since July 20, 2009. The pair subsequently bounced back to 0.8321 at the close of trade on Friday, on speculation that the Reserve Bank of Australia may intervene to support the Aussie.

The pair is likely to find support at 0.7701, the low of July 13, 2009, and resistance at 0.8861, last Monday's high.

Next week, Australia will publish reports on private capital expenditure, construction activity and new motor vehicle sales. Research groups will also publish two reports on the country's overall economic health.

In the United States, meanwhile, important data will be released on existing and new home sales, durable goods orders, gross domestic product and initial jobless claims. A slew of other reports will also be published on U.S. consumer confidence, manufacturing, crude oil inventories and personal spending. The Chairman of the Federal Reserve, Ben Bernanke, is also due to speak at a public engagement.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect AUD/USD.

Monday, May 24

Australia will begin the week by publishing a monthly report on the change in the number of new cars and trucks sold domestically, an indicator of consumer confidence.

Later in the day, an industry group will release key data on existing U.S. home sales, a leading indicator of economic health.

Tuesday, May 25

A research group will publish a closely watched report on U.S. consumer confidence. The data, which is based on a survey of about 5,000 households, is an important signal of consumer spending.

Wednesday, May 26

Bernanke is due to speak at a conference in Tokyo, where his comments will likely be scrutinized for clues to future shifts in monetary policy.

Later Wednesday, Australia will publish a quarterly report on the change in the total inflation-adjusted value of construction projects completed. A research group will also publish a composite index based on nine economic indicators for the country.

Meanwhile, the U.S. will publish key data on durable goods orders, a leading indicator of production. The country will also release a report on new home sales. The report, which shows an annualized number of new single-family homes that were sold during the previous month, is a key signal of overall economic health. Also Wednesday, an industry group will publish data on U.S. mortgage applications.

Thursday, May 27

Australia will publish a quarterly report on the change in the total inflation-adjusted value of new capital expenditures made by private businesses. A research group, the Conference Board, will also release monthly data on its Leading Index for Australia, which is based on seven economic indicators.

Later in the day, the U.S. will release data on initial jobless claims, a key indicator of overall economic health. The country will also publish a preliminary GDP report.

Friday, May 28

The U.S. will release data on consumer price inflation and personal income and spending. An industry group will also publish a report on the manufacturing sector in the Chicago area, and the University of Michigan will release revised data on U.S. consumer sentiment and inflation expectations.

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