COZforex: The Australian dollar advanced against its US counterpart on Friday to re-approach a one-month high hit earlier in the week, as traders reassessed their expectations for how quickly the Federal Reserve will roll back its stimulus program following the release of disappointing US economic data.

AUD/USD rise to 0.9066 on Wednesday, the pair’s highest since January 13, before subsequently consolidating at 0.9035 by close of trade on Friday, up 0.61% for the day and 0.84% higher for the week. COZforex senior currency strategist Ian • Quigley said, AUD/USD is predicted to find support at 0.8942, and a drop through could take it to the next support line of 0.8887. Meanwhile, the pair is predicted to find its first resistance at 0.9040, and a rise through could take it to the next resistance line of 0.9083.

This disappointing factory report came one day after the Commerce Department said that retail sales fell 0.4% in January, confounding expectations for a 0.3% increase. The soft data fuelled concerns that the economic recovery has lost momentum since the end of last year as inclement winter weather weighed on growth.

Meanwhile, in Australia, official data on Thursday showed that the nation’s unemployment rate unexpectedly rose to 6.0% in January from 5.8% in the previous month, compared to expectations for an unchanged reading. The economy shed 3,700 jobs last month, confounding expectations for jobs growth of 15,000.

Chinese exports rise 10.6% in January from a year earlier, outstripping expectations for 2% gain, while imports jumped 10% and the trade surplus widened. Meanwhile, the Asian nation is Australia's biggest export partner.

Data from the Commodities Futures Trading Commission released Friday showed that speculators reduced their bearish bets on the Australian dollar in the week ending February 11. Net shorts totalled 47,403 contracts, down 14.6% from the previous week’s total of 55,523 net shorts.

In the week ahead, market players will continue to pay close attention to U.S. economic data releases for further indications on the strength of the economy and the future course of monetary policy. Meanwhile, minutes of the Reserve Bank of Australia’s most recent policy-setting meeting will also be in focus.

(COZ forex UK)