Browsing: AUD/USD Forecast

  • AUD/USD pared some losses by the end of week. 
  • NFP lent some support to the pair for the time being. 
  • RBA, Fed’s meeting minutes and US ISM survey are major risk events next week. 

The Australian Dollar saw an entire week under the dominance of bears. The AUD/USD pair fell below the 0.7500 psychological mark and tested 21 December lows of 0.7445 area. The downtrend stemmed from Fed Chair Powel’s comments last week that triggered a rally in Greenback across the board. However, a nonfarm payroll report for the US came out and turned the upside-down of the market. Although the pair closed in red, it was able to catch some bids at the end of the session.

AUD/USD on NFP

The employers were able to add 850k new jobs in the US economy, which has been the strongest figure since August 2020. The momentum has clearly picked over the past two months.

Despite a sharp rise in payrolls, the unemployment rate rose to 5.9%. The rise emerged from household measures of employment that dropped to 18k. Thus, although the labor supply increased, the reduction in unemployment will take more time.

The AUD/USD pair picked up bids from 8-month lows amid little discouraging figures of unemployment. The upbeat jobs addition could not help the Greenback rally to continue. The pair has pared off some of the weekly losses.

What to watch next week?

The RBA meeting next week can also be decisive for the pair to find the directional bias. It should be noted here that on Monday, July 5, American trading floors will be closed. The States will continue to celebrate the public holiday (Independence Day). Literally the next day, during the Asian session on Tuesday, the RBA will announce its verdict on the prospects for monetary policy. For AUD/USD traders, this means that the pair may show increased volatility in the near future.

On the other hand, the US ISM survey and Fed meeting minutes are also important events next week that can provide fresh impetus to the market.

AUD/USD technical weekly forecast: Are bulls too dominating?

The bullish bar on the daily chart shows signs of bottom reversal with healthy volume. However, immediately, it is capped by 200-day SMA ahead of congestion of 20 and 50 DMAs.

Bulls need to clear the resistance of 0.7550 and sustain above the level to retain the bullish traction. Furthermore, local high and 20-day SMA at 0.7600 area can serve as another resistance level. However, we can see a mild corrective retracement of Friday’s bulls on Monday and Tuesday that can provide fresh buying opportunities.

Daily chart of AUD/USD

Daily chart of AUD/USD

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AUD/USD forecast and technical analysis ► preview of the major events that will move the Australian Dollar (A$) in the upcoming week.  Here are some general data. Scroll down for the latest AUD/USD outlook

Aussie/USD characteristics

The Aussie is a “risk-on” currency. It usually rises when commodities and stocks advance and when the risk appetite improves. Its fate deteriorates when the markets are in “risk aversion” mode: geopolitical worries increase and the outlook for global demand is sluggish.

The Aussie’s technical behavior is usually admirable. This implies respecting lines of resistance and support, diagonal trend lines, etc. AUD/USD has become more popular for techies in recent years, even after the financial crisis which brought the famous “carry trade.” to a halt.

Australia exports metals such as copper and iron. We often find a positive correlation between the price of iron ore and the Aussie $. The mining boom kept Australia out of recession for over 25 years. The land down under enjoyed the high resources demand with China playing a key role. While peak investment is probably behind us, the sector still churns out quite a lot of raw materials, as China has a soft landing.

AUD/USD Recent Moves

The Reserve Bank of Australia clarified it will not change interest rates anytime soon, but they tend to lean to cutting rates. This is due to low inflation. The labor market was looking good early in the year but now looks more complicated.

Risks could arise from the Chinese economy: Australia’s No. 1 trading partner could see a slowdown after the Party Congress in October 2017. So far, things look stable, but 2018 could be different.

Latest weekly AUD/USD forecast

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