Forex - AUD/USD weekly outlook: October 20 - 24

Investing.com - The Australian dollar edged lower against its U.S. counterpart on Friday, as upbeat U.S. economic data eased concerns over the strength of the recovery.

AUD/USD hit a daily low of 0.8734 on Friday, before subsequently consolidating at 0.8744 by close of trade, down 0.14% for the day but still 0.66% higher for the week.

The pair is likely to find support at 0.8684, the low from October 16, and resistance at 0.8827, the high from October 16.

The greenback was boosted after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose to 86.4 in October, the most since July 2007.

Another report showed that U.S. housing starts rose more than expected in September, bolstering the outlook for the sector.

The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015.

The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.33% to 85.31 late Friday, but still ended the week lower, its second consecutive weekly decline.

Data from the Commodities Futures Trading Commission released Friday showed that speculators added to their bearish bets on the Australian dollar in the week ending October 14.

Net shorts totaled 30,271 contracts, compared to net shorts of 26,486 in the preceding week.

In the week ahead, investors will be awaiting U.S. data on consumer price inflation and new home sales for fresh signals on the strength of the economic recovery.

Market players are also looking ahead to a raft of Chinese economic data later this week, including reports on third quarter gross domestic product, as well as data on industrial production and retail sales.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, October 21

The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.

China is to release what will be closely watched data on third quarter gross domestic product and separate reports on industrial production and fixed asset investment.

The U.S. is to release private sector data on existing home sales.

Wednesday, October 22

Australia is to publish data on consumer price inflation, which comprises the majority of overall inflation.

The U.S. is to produce data on consumer prices.

Thursday, October 23

RBA Governor Glenn Stevens is to speak at an event in Sydney; his comments will be closely watched.

China is to release the preliminary reading of its HSBC manufacturing index.

The U.S. is to publish its weekly report on initial jobless claims.

Friday, October 24

The U.S. is to round up the week with a report on new home sales.