Key Points:

• Last week's fundamentals could set the pair up for further gains.
• Technicals remain bullish despite the pair cooling off last week.
• Any rally will likely be more sedate than those seen recently.

After a rather dicey week, it's worth taking stock of what exactly happened to the AUD and what this could mean moving ahead. Additionally, we should look at what news is worth keeping an eye on in the wake of the drop in unemployment to 5.7% and also how this fits in with the technical forecast.

The Aussie Dollar was under heavy selling pressure straight out of the gate last week, sinking around 40 pips despite a lack of economic news. However, things soon turned around in the subsequent session, the pair surging strongly higher as the NAB Business Confidence and Westpac Consumer Sentiment figures came in at 10 and 2.3% respectively.

However, despite building on this bullishness following the Flynn drama and Trump's Press debacle, the AUD moderated and fell back to where it opened the week. This came as somewhat of a surprise given that the Australian Unemployment Rate had dropped to 5.7% during Friday's session. Regardless, now that the pair has cooled off slightly, the result means that the AUDUSD should be well positioned to make another move higher which is largely reflected in the technical bias.

Specifically, the AUD retains its strong bullish bias even though it appears to be slowing its ascent to a significant degree. Notably, the 12, 20, and 100 day moving averages are effectively as bullish as they can be with little chance of becoming bearish in the near-term. In addition, the Parabolic SAR and ADX readings are highly suggestive of the uptrend continuing moving ahead. However, the constant threat of becoming overbought is providing some resistance which could see this bullish phase slow substantially moving on and this is worth keeping in mind.

As for what lies ahead in the news, the RBA will be in focus given that we have the monetary policy meeting minutes due to be posted and two speaking engagements from deputy governor Lowe. However, the Cash Earnings data will also be worth keeping a close eye on. This is predominantly because it could help to build on any positive sentiment still in the wings following the drop in the Unemployment rate that we saw last week. This being said, also monitor the US Existing Home Sales figures due around the same time as they could moderate the day's performance.

Ultimately, we could have quite a good week lying ahead of us for the Aussie Dollar if everything goes according to plan. However, as we live in the age of Trump, it may be best to keep half an eye on the white house just in case of any further political bombshells.

Daily Pivots: (S1) 119.27; (P) 120.18; (R1) 120.66; More...

Intraday bias in EUR/JPY stays neutral first. On the downside, below 119.32 will extend the corrective fall from 124.08. In that case, we'd expect strong support from 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39) to contain downside and bring rebound. On the upside, break of 121.32 minor resistance should revive the case that such correction is completed. And, intraday bias would then be turned back to the upside for 123.30/124.08 resistance zone.

In the bigger picture, price actions from 109.20 medium term bottom are seen as part of a medium term corrective pattern from 149.76. There is prospect of another rise towards 126.09 key resistance level before completion. But even in that case, we'd expect strong resistance between 126.09 and 141.04 to limit upside, at least on first attempt. Nonetheless, decisive break of 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39) will argue that rise from 109.20 is completed and turn outlook bearish for 61.8% retracement at 114.88 and below.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 139.08; (P) 140.50; (R1) 141.39; More...

Intraday bias in GBP/JPY is mildly on the downside for 138.53 support. Break will target 136.44. Overall, price actions from 148.42 are seen as a corrective pattern. Strong support could be seen at 50% retracement of 122.36 to 148.42 at 135.39 to bring rebound. Above 142.79 will turn bias back to the upside.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern with a test on 122.36 low next. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement at 167.78.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 0.8472; (P) 0.8497; (R1) 0.8528; More...

Intraday bias in EUR/GBP stays neural at this point. Fall from 0.8851 is seen as the third leg of the corrective pattern from 0.9304. Below 0.8445 will target 0.8303 low first. Break will confirm our view and target 0.8116 key cluster support level. However, on the upside, break of 0.8643 will invalidate our view. In that case, intraday bias will be turned to the upside for 0.8851 to extend the corrective pattern from 0.8303.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 1.3804; (P) 1.3853; (R1) 1.3881; More...

Intraday bias in EUR/AUD remains neutral for the moment. We're holding on to the view that price actions from 1.6587 are corrective in nature. Thus, we'd expect strong support from 1.3671 key level to contain downside and bring rebound. Decisive break of 1.4025 support turned resistance will indicate near term reversal. In this case, intraday bias will be turned back to the upside for 1.4289 resistance first.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. We'd expect strong support from 1.3671 key level to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will indicate completion of such correction and turn outlook bullish for retesting 1.6587 high. However, sustained break of 1.3671 will invalidate our bullish view and would turn focus back to 1.1602 long term bottom.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 1.0632; (P) 1.0641; (R1) 1.0647; More...

Intraday bias in EUR/CHF remains neutral for the moment. With 1.0706 resistance intact, outlook stays bearish and deeper decline is expected. Firm break of 1.0620 key support level will extend the larger decline from 1.1198 to 1.0485 fibonacci level. However, break of 1.0706 resistance will indicate short term bottoming and turn bias back to the upside. Further break of 1.0749 resistance will raise the chance of medium reversal.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. On the upside, break of 1.0897 resistance is needed to confirm completion of such fall. Otherwise, outlook will stay bearish.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

EURUSD

The EURUSD was indecisive last week. Price attempted to push lower bottomed at 1.0521 but closed higher at 1.0610. The bias is neutral in nearest term. Immediate support is seen around 1.0590. A clear break below that area could trigger further bearish pressure testing 1.0520/00 area. Immediate resistance is seen around 1.0680. A clear break and daily close above that area would expose 1.0750 – 1.0800 region. Overall I remain neutral.

GBPUSD

The GBPUSD didn’t make significant movement last week. The bias is neutral in nearest term. Immediate support is seen around 1.2385. A clear break below that area could trigger further bearish pressure testing 1.2350/25 area. Immediate resistance is seen around 1.2450. A clear break above that area could trigger further bullish pressure testing 1.2500 or higher. Overall I remain neutral.

USDJPY

The USDJPY attempted to push higher last week topped at 114.95 but whipsawed to the downside and closed lower at 112.87. The bias is bearish in nearest term testing 112.00 area. Immediate resistance is seen around 113.50. A clear break above that area could lead price to neutral zone in nearest term testing 114.00 area but overall I still prefer a bearish scenario at this phase and any upside pullback should be seen as a good opportunity to sell.

USDCHF

The USDCHF was indecisive last week. The bias is neutral in nearest term probably with a little bullish bias testing 1.0100 area. Immediate support is seen around 1.0000. A clear break below that area could trigger further bearish pressure testing 0.9950 area. As you can see on my H4 chart below, the double top scenario remains valid (1.0335) but price is still moving inside a bullish channel. We need a clear break below that bullish channel and 0.9950 support area to continue the bearish scenario. Overall I remain neutral.

Daily Pivots: (S1) 1.0584; (P) 1.0630 (R1) 1.0656; More.....

Intraday bias in EUR/USD remains neutral for the moment. With 1.0713 minor resistance intact, we're holding on to our bearish view. That is, corrective rise from 1.0339 has completed at 1.0828 already. Below 1.0520 will target 1.0339 first. Break will extend the larger down trend to parity. However, above 1.0713 will dampen our view and turn focus back to 1.0828 instead.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 1.2359; (P) 1.2434; (R1) 1.2482; More...

Intraday bias in GBP/USD remains neutral for the moment. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box

Daily Pivots: (S1) 0.9980; (P) 1.0007; (R1) 1.0047; More.....

Intraday bias in USD/CHF remains neutral for the moment. Near term outlook stays cautiously bullish as long as 0.9929 minor support holds. Fall from 1.0342 could have finished at 0.9860 already. Above 1.0118 will turn bias back to the upside for retesting 1.0342. However, break of 0.9929 will likely extend the decline from 1.0342 through 0.9860 low.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone. Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box