COZfx: AUD/USD weekly outlook

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COZforex: The Australian dollar bounced off a 12-week low against its US counterpart on Friday, however the greenback remained supported during expectations the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

AUD/USD clawed back from 0.9056 on Friday, the pair’s lowest since September 4, to subsequently consolidate at 0.9110 by close of trade, up 0.08% on the day but 0.65% lower for the week. COZforex senior currency strategist Ian • Quigley said, AUD/USD is predicted to find support at 0.9042, and a drop through could take it to the next support line of 0.9001. Meanwhile, the pair is predicted to find its first resistance at 0.9137, and a rise through could take it to the next resistance line of 0.9191.

LME Copper prices declined 0.9% or $63.5MT to $6988.0/MT. Aluminium prices fell 1.2% or $20.0/MT to $1701.0/MT.

The Australian dollar came under additional pressure amid speculation the Reserve Bank of Australia will intervene in the foreign-exchange market to weaken the Aussie. Reserve Bank of Australia Deputy Governor Phillip Lowe said earlier in the week that the threshold for the central bank intervening in the currency market was “fairly high.”

Demand for the greenback remained underpinned after minutes of the Fed’s October meeting said the central bank could start scaling back its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.

In the week ahead, investors will be focusing on Friday’s US nonfarm payrolls report for November. The Fed, which holds its next meeting on December 17-18, has said the timing of its tapering depends on the health of the labor and housing markets.

(COZ forex UK)