AUD: Australian Dollar determines movement direction at the beginning of the week

At the Forex currency market the Australian Dollar rate remains close to the opening levels on Monday, determining movement direction. On the one hand the pair AUD/USD is under pressure caused by escape of the players from risky positions which has been observed today; on the other hand the Australian currency has not exhausted its potential for growth yet.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes up, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0570 the pair will go to 1.0585 and 1.0600.

Situation in Australia has not changed dramatically by this morning. Unemployment rate reduced to 4.9% in March versus the preliminary level of 5.0% and employment rate rose by 37.8 thousand last month against the forecast of increase by 24 thousand. Therefore, strong performance in the employment sector pushed the AUD to go upward, instilling investors with the idea that the RBA can resume monetary tightening policy earlier. On the other hand deficit of trade balance was recorded in the country for the first time since spring 2010 (February -?$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

The data released last week showed that the level of consumer lending Westpac in Australia increased by 1.2%, to the level of 105.3 points in April against preliminary level of -2.4%. Such positive data has reflected public confidence in the prospects of economy. Following the meeting of the Reserve Bank of Australia last week it was decided to keep current level of the interest rate unchanged at the level of 4.75% per annum – it has been for the fourth time already that the RBA does not dare to continue monetary policy tightening.

Earlier Finance Minister of Australia Mr. Swan said that Australian economy is positive and will only benefit from economic growth of the developing countries. He thinks that although IMF has revised GDP forecast downward for Australia, country’s economy continues to recover. Note that IMF research showed that GDP forecast for Australia had been reduced to 3% in 2011 against the previous level of 3.5%. Floods in January partly impacted the revision of the forecast.

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