AUD/USD Weekly Forecast: Greenback Weak, Focus on US CPI

• The RBA was not as hawkish as most had expected.

• Australia recently reported higher-than-expected figures for Q1 inflation and employment.

• The dollar was weak after unemployment claims jumped.

The AUD/USD weekly forecast remains bullish. The dollar weakness could continue next week with a focus on the US inflation report.

Ups and downs of AUD/USD

The AUD/USD pair had a slightly bearish week as markets absorbed the outcome of the RBA policy meeting. On Tuesday, the Reserve Bank of Australia held rates as expected. However, the central bank was not as hawkish as most had expected. 

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Australia recently reported higher-than-expected figures for Q1 inflation and employment. As a result, economists had expected that the RBA would signal a possible rate hike. When they did not, the Aussie fell. Meanwhile, the dollar was also weak after unemployment claims jumped, confirming easing labor market conditions.

Next week’s key events for AUD/USD

Major reports from the US next week will include inflation and retail sales. At the same time, investors will focus on Australia’s employment figures. The US PPI and CPI figures will guide the Federal Reserve on the next step to take regarding monetary policy. Higher-than-expected figures would mean further delays in rate cuts. On the other hand, lower-than-expected figures would increase the chance of a rate cut in September.

Meanwhile, Australia’s employment figures will show the state of its labor market which has remained resilient. 

AUD/USD weekly technical forecast: Bulls pause below the 0.6650 solid barrier

On the daily chart, the bias for the AUD/USD price is bullish because it sits above the 22-SMA, and the RSI is above 50. However, on a larger scale, the price has remained in a sideways move for some time now. It has mostly traded between the 0.6475 support and the 0.6650 resistance level. 

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Bears once tried to break out of this range area but failed, making a false breakout. Now, the price is back to the resistance level. The level is strong because it lies between the 0.5 and 0.618 key Fib levels. Therefore, bulls face a solid barrier that could lead to another bounce lower. 

In the coming week, bulls will need a significant catalyst to break past this resistance zone. This would clear the path to the 0.6850 resistance level. However, if the resistance holds firm, the price will likely fall to retest the 0.6475 support.

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