Forex Market: AUD/USD trading outlook for June 6th

Friday’s trade saw AUD/USD within the range of 0.7224-0.7369. The pair closed at 0.7367, soaring 1.89% on a daily basis. It has been the 11th gain in the past 23 trading days and also the sharpest one since June 2nd, when the pair appreciated 2.17%. The daily high has been an exact test of the high from May 17th. In weekly terms, AUD/USD added 2.56% to its value during the current week. It has been the 10th gain in the past 22 weeks and also the sharpest one since the week ended on March 6th, when the major pair advanced 4.38%. AUD/USD has gone up 1.85% so far during the current month, following a 4.87% slump in May. The latter has been the worst monthly performance since July 2015.

On Monday (June 6th) AUD/USD trading may be influenced by the following macroeconomic reports and other events as listed below.

Fundamentals

Australia

MI Inflation Gauge

At 1:00 GMT on Monday (June 6th) the University of Melbourne will release its estimate of inflation in Australian economy as of May. Annualized inflation estimate for April pointed to a rate of 1.5%. If inflation rate tends to slow down, this lowers the probability of an interest rate hike by the Reserve Bank of Australia (RBA), which would usually have a bearish effect on the national currency. It is so, because assets, offering lower yields tend to be unattractive to international investors, who will look to re-direct their capital to another state or region. As a result, demand for the domestic currency will be reduced.

Job Advertisements

At 1:30 GMT the Australia and New Zealand Banking Group (ANZ) will publish data regarding the number of job advertisements in Australia in May. It encompasses advertisements in the major metropolitan newspapers and on the Internet sites. The corresponding index, based on a survey by the ANZ, dropped 0.8% to 153 872 advertisements in April compared to March.

Internet job advertisements were 0.7% fewer in April, after a 0.4% increase in the preceding month. At the same time, newspaper job advertisements fell 6.2% during the period, following an 11.4% slump in March.

This indicator is used for projecting employment growth in Australia, as it reflects labor market conditions in the future. An increase in the number of jobs would have a limited bullish effect on the Australian dollar, while a decrease would have the opposite effect.

United States

Feds Yellen Statement

At 16:00 GMT the Federal Reserve Chair, Janet Yellen, is expected to take a statement. Any remarks on monetary policy or US macroeconomic outlook, especially after the disappointing employment growth numbers last month, would certainly heighten USD volatility.

Correlation with other Majors

Taking into account the business week ended on June 3rd 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 (0.9727, or very strong)
AUD/USD to EUR/USD (0.9448, or very strong)
AUD/USD to GBP/USD (-0.1623, or weak)
AUD/USD to USD/CAD (-0.7929, or strong)
AUD/USD to USD/JPY (-0.9234, or very strong)
AUD/USD to USD/CHF (-0.9452, or very strong)

1. During the examined period AUD/USD moved almost equally in one and the same direction with EUR/USD and NZD/USD. This relationship has been the most pronounced between AUD/USD and NZD/USD.

2. AUD/USD moved strongly in the opposite direction compared to USD/CAD during the week.

3. AUD/USD moved almost equally in the opposite direction compared to USD/JPY and USD/CHF during the period in question. This relationship has been the most pronounced between AUD/USD and USD/CHF.

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 – 0.7320
R1 – 0.7416
R2 – 0.7465
R3 – 0.7561

S1 – 0.7271
S2 – 0.7175
S3 – 0.7126

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

Central Pivot Point – 0.7295
R1 – 0.7441
R2 – 0.7515
R3 – 0.7661

S1 – 0.7221
S2 – 0.7075
S3 – 0.7001