Forex Market: AUD/USD trading outlook for November 30th

Friday’s trade saw AUD/USD within the range of 0.7180-0.7241. The pair closed at 0.7195, falling 0.44% on a daily basis, while marking its third consecutive trading day of losses. The daily low has been the lowest level since November 23rd, when a low of 0.7157 was registered. In weekly terms, AUD/USD lost 0.62% this week, while marking its first drop in the past three weeks. On the other hand, the pair is up 0.71% so far during the current month.

On Monday (November 30th) AUD/USD trading may be influenced by a number of macroeconomic reports as listed below.

Fundamentals

Australia

Inflation estimate

At 23:30 GMT on Sunday (November 29th) the University of Melbourne will release its estimate of inflation in Australian economy as of November. Annualized inflation estimate for October pointed to a rate of 1.8%, after a level of 1.9% in September. The latter has been the highest rate since November 2014, when an annual rate of 2.2% was projected. If inflation rate rises, this adds to the case of an interest rate hike by the Reserve Bank of Australia (RBA), which usually has a bullish effect on the national currency. It is so, because assets, offering higher yields tend to attract more international investors, who will look to buy the domestic currency and respectively, its demand will be boosted.

Private sector lending

Private sector lending in Australia probably expanded for a 52nd consecutive month in October, going up at a monthly rate of 0.6%, according to the median forecast by experts. In September compared to August lending surged 0.8%. This indicator reflects the ability of the nations private sector to afford huge expenditures, which could be a driving force behind economic growth. Thus, the indicator provides clues over general business conditions in Australia. In case private sector lending expanded at a more considerable pace than projected, this would boost the Australian dollar. The Reserve Bank of Australia is to release the official data at 0:30 GMT on Monday.

United States

Chicago Manufacturing Survey

The Chicago Purchasing Managers Index (PMI) probably slowed down to a reading of 55.0 in November, according to market expectations, from 56.2 during the prior month. The latter has been the highest reading since January 2015, when the PMI came in at 59.4. The index reflects business conditions in the regions manufacturing sector and is interrelated with the Manufacturing Index, published by the Institute for Supply Management (ISM). A reading below the key level of 50.0 is indicative of pessimism (contraction in manufacturing activity). In case the PMI slowed down more than forecast, this would have a moderate bearish effect on the US dollar. The MNI Deutsche Börse Group will release the official reading of the Chicago barometer at 14:45 GMT.

Pending Home Sales

The index of pending home sales in the United States probably rose for the first time in three months in October, going up at a monthly rate of 1.0%, according to the median estimate by experts. In September pending home sales unexpectedly fell 2.3%, or at the sharpest rate since December 2014, when a 3.7% slump was registered.

In annual terms, the index of pending home sales rose 3.0% in September, or at the slowest pace since October 2014, when a climb rate of 2.2% was reported.

When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale and is currently the most accurate indicator regarding the US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.

In case pending home sales increased more than anticipated, this would have a moderate bullish effect on the greenback. The National Association of Realtor’s (NAR) will release the official index value at 15:00 GMT.

Correlation with other Majors

Taking into account the week ended on November 29th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.7979, or strong)
AUD/USD to EUR/USD (0.5014, or strong)
AUD/USD to GBP/USD (0.3328, or moderate)
AUD/USD to USD/CHF (-0.5026, or strong)
AUD/USD to USD/JPY (-0.8349, or very strong)
AUD/USD to USD/CAD (-0.8970, or very strong)

1. During the examined period AUD/USD moved strongly in one and the same direction with NZD/USD and EUR/USD, while moving strongly in the opposite direction compared to USD/CHF.

2. AUD/USD moved almost equally in the opposite direction compared to USD/JPY and USD/CAD during the past week.

3. The strength of relationship between AUD/USD and GBP/USD movement was moderate during the period in question.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7205
R1 – 0.7231
R2 – 0.7266
R3 – 0.7292

S1 – 0.7170
S2 – 0.7144
S3 – 0.7109

By using the traditional method of calculation again, the weekly pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7213
R1 – 0.7268
R2 – 0.7342
R3 – 0.7397

S1 – 0.7139
S2 – 0.7084
S3 – 0.7010