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Forex - AUD/USD weekly outlook: May 9-13

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Forex Pros - Last week saw the Australian dollar pull back from a record high against its U.S. counterpart, posting its first decline in seven weeks as a broad selloff in commodities pushed the currency lower.

AUD/USD hit 1.0535 on Thursday, the pair's lowest since April 20; the pair subsequently consolidated at 1.0697 by close of trade, slumping 2.4% over the week.

The pair was likely to find support at 1.0535, Thursday's low and resistance at 1.0876, the high of May 4.

The Aussie retreated from a post-float high of 1.1011 as commodity prices tumbled after reports that al-Qaeda leader Osama bin Laden had been killed by U.S. forces in Pakistan.

The Aussie remained under pressure on Tuesday after the Reserve Bank of Australia left its benchmark interest rate unchanged at 4.75%, saying that a record domestic dollar will contain consumer prices until late this year.

On Thursday, the Aussie extended its decline after official data showed that retail sales unexpectedly dropped in March, declining 0.5% from the previous month. Economists had expected a 0.5% rise.

However, the Aussie regained ground on Friday after the RBA increased its inflation forecast and said higher interest rates may be needed "at some point", as mining investment drives down unemployment and inflation accelerates.

Elsewhere Friday, official data showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years.

A separate report showed that the U.S. unemployment rate rose to 9.0% last month from 8.8% in March. It was the first increase in the jobless rate since November, when it hit 9.8%. Analysts had expected that payrolls would rise by 185,000 and that the jobless rate would remain unchanged at 8.8%.

In the week ahead, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while Australia is to publish a government report on the nation's unemployment rate.

Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.

Monday, May 9

Australia is to publish data on the number of new jobs advertized, an important gauge of the jobs market.

Tuesday, May 10

Australia is to publish official data on its trade balance as well as a report on business confidence. Later in the day, the country's Treasury is to announce the details of its annual budget.

Meanwhile, the U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.

Wednesday, May 11

The U.S. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. In addition, the country is to publish government data on crude oil inventories and the federal budget balance.

Thursday, May 12

Australia is to release official data on employment change and the country's unemployment rate, a leading indicator of economic health.

The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.

Friday, May 13

The U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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