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  • Aussie soared after Fed chair Powell’s dovish speech.
  • The US labor market is still tight as the nonfarm payrolls came in higher than expected.
  • Investors are expecting the RBA to deliver a 25bps rate hike next week.

The AUD/USD weekly forecast is bullish as investors expect a rate hike from the RBA next week. The pair closed the week higher, thanks to the weaker dollar.

Ups and downs of AUD/USD

Positive data from the US included the CB consumer confidence and the GDP report, which showed a healthier economy than expected. On the other hand, some figures dropped from the previous, weakening the dollar against the Australian dollar. These include the job openings report, the core PCE, and initial jobless claims.

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However, the biggest move came after Fed chair Jerome Powell spoke on Wednesday. He said the central bank was ready to slacken the pace of rate increases beginning in December. This saw the dollar fall against other major currencies.

US firms added more workers than anticipated despite rising recessionary fears and raised salaries in November. Nevertheless, the Federal Reserve will likely continue to raise interest rates at a slower pace starting this month.

Next week’s key events for AUD/USD

AUD/USD weekly forecast

Next week, investors will pay attention to the RBA meeting, which will include an interest rate decision. The focus will also be on the US PPI report, which will point to inflation.

All 30 economists surveyed by Reuters believe that the Reserve Bank of Australia will hike interest rates on December 6 by a modest 25 basis points to 3.10 percent, recording its third consecutive increase after a series of half-point increases.

AUD/USD technical weekly forecast: Bullish momentum pushes beyond 0.6778

AUD/USD weekly forecast

The price is trading above the 22-SMA, and the RSI is over 50, as seen on the daily chart, indicating that the current move is bullish. The bullish move paused at the 0.6778 resistance level and could not break above for some days.

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The price traded within the 0.6600-0.6778 range before finally breaking above the 0.6778 resistance. It is currently trading above this level.

Bulls must make a strong bullish candle above the recently broken resistance for the bullish trend to continue. If this happens, the price will retest and probably take out the next resistance at 0.7001. However, if bears return at this point, it might fall back to the 22-SMA.

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