AUDUSD gained considerable ground last week, buoyed by a renewed appetite for risk in the currency markets.

The rate started the week by selling off, despite news that ANZ Job Advertisements increased by 4.3% month on month, considerably better than the previous reading of a -1.2% decline. That number provides a good indication that Australian employers continue to be optimistic despite the recent RBA interest rate increases and the debt issues in Europe.

The pair then made its weekly low of 0.8081 on Tuesday, with Australian Home Loans showing a drop of -1.8% month on month, slightly better than the consensus of a -1.9% decline and despite having the previous number revised upward to -2.9% from -3.4%.

On Wednesday, AUDUSD turned around and started trading higher after RBA Governor Stevens said that the effects of the European debt crisis would not be as profound on Australia because Australian exports to the E.U. were "quite small" and amount to only 5% of Australian exports.

Wednesday also saw the Australian Unemployment Rate improve to 5.2% versus an expected 5.4% consensus. Also, 26.9K new jobs were added to the Australian economy, considerably better than the 20.1K jobs expected.

The rate went on to make its weekly high of 0.8508 on Thursday as the Chinese announced that their exports had risen by a whopping 48.5% in May and that Chinese imports had risen an equally impressive 48.3%. This news propelled the Aussie higher since China buys the majority of Australian exports.

AUDUSD then traded slightly off of its high to close at 0.8502 on Friday, up an impressive 3.3% on the week.

Fundamental Outlook for AUDUSD

The primary market-moving economic data releases and policymaker speeches scheduled for this coming week in Australia and United States are as follows:

Australia:

The economic calendar is considerably calmer for Australia this coming week, and features the release of the Monetary Policy Meeting Minutes from the RBA on Thursday.

Monday begins the week on a peaceful note with a Bank Holiday in Australia.

Tuesday offers the highlighted Monetary Policy Meeting Minutes from the RBA, plus a speech by RBA Deputy Governor Battellino in Sydney.

Wednesday ends the week with Housing Starts (7.1% Q/Q) and the MI Leading Index (last 0.9% M/M) since Thursday and Friday have nothing notable due out.

United States:

This week's economic release calendar for the United States is active and offers some key data, featuring important inflation data that includes Wednesday's PPI data and the CPI numbers due out on Thursday.

Monday begins the week with a speech by FOMC Member Bullard in Tokyo, who will also be speaking in Hong Kong on Tuesday.

Tuesday also offers Import Prices (-1.1% M/M), the Empire State Manufacturing Index (20.1) and TIC Long-Term Purchases (77.3B). The NAHB Housing Market Index (22) is also scheduled tentatively for Tuesday.

These numbers will be followed on Wednesday by the featured release of the Producer Price Index or PPI (-0.5% and 0.1% Core M/M), as well as Building Permits (0.63M), Housing Starts (0.65M), Industrial Production (0.9%M/M) and the Capacity Utilization Rate (74.6%). In addition, Fed Chairman Bernanke is scheduled to make a speech in New York.

Thursday is also a weekly highlight, featuring the important Consumer Price Index or CPI data (-0.2% and 0.1% Core M/M), as well as the Current Account (-120B), Initial Jobless Claims (454K), the Philly Fed Manufacturing Index (21.3) and the CB's Leading Index (0.4% M/M).

That wraps up the week since Friday has nothing notable scheduled for release.

Technical Outlook for AUDUSD

On the technical front, AUDUSD once again saw volatile trading activity last week. The rate initially fell to 0.8081 in the early part of the week, only to then rally sharply up to 0.8508. The rate then managed to close just under that weekly high level at 0.8502.

Furthermore, AUDUSD persists in trading under its 200-day Moving Average that has now flattened out at 0.8977 after having been positively sloping. Also, the 14-day RSI for AUDUSD currently seems to be confirming the upward move with higher highs and higher lows, but the indicator remains in neutral territory at 51.

Nevertheless, given the significant momentum behind this latest move and its seemingly impulsive nature, this coming week may well see the rate make another serious shot at breaking the recent 0.8066 low.

This most recent corrective rally now appears to be the final C leg of an A-B-C correction, with an initial wave equality objective at 0.8565, and a 1:1.618 Fibonacci projection objective at 0.8864. Also, the targeted range of the most likely fourth wave of one lesser degree stretches from 0.8709 to 0.9077, so that argues for the larger extension higher for this corrective C-wave activity during the coming week.

The chart for AUDUSD shows resistance levels in the 0.8508/77 region, at 0.8709 and at 0.9077. Support shows up at 0.8425, at 0.8256 and in the 0.8066/71 region, as well as at the psychological 0.8000 level.

Note: Past performance is not indicative of future results.

Figure 1: Daily candlestick chart of AUDUSD showing its 200-day MA in red, Bollinger Bands in green and the 14-day RSI in the indicator box in blue.