Forex Trading

AUD/USD Weekly Forecast: Geopolitics Take Toll on Aussie


  • The AUD/USD weekly forecast is overshadowed by strong US retail sales data and deteriorating risk sentiment.
  • Poor employment data from Australia and Middle East tensions weakened the Aussie.
  • Australia will release its CPI report next week.

The AUD/USD weekly forecast unveils a bearish trend due to the dual forces of dollar resilience and escalating geopolitical tensions.

Ups and downs of AUD/USD

The Aussie ended the week with a bearish candle amid economic data from the US and Australia. When the week began, the US released higher-than-expected retail sales data, which indicated robust consumer spending in the economy. As a result, rate-cut bets fell, and the dollar rose. Moreover, Powell’s speech on Tuesday confirmed that the Fed would hold higher interest rates for longer to tackle inflation. 

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Meanwhile, poor employment data from Australia and Middle East tensions weakened the Aussie. Australians lost jobs in March, indicating a slowing labor market.  

Next week’s key events for AUD/USD

 

Australia will release its CPI report next week, while the US will release durable goods orders and GDP data. The CPI report will play a significant role in shaping the outlook for RBA rate cuts. At the moment, there is a 65% chance that the RBA will cut rates in December. Therefore, if the report shows further easing in inflation, bets for the December cut might increase. Meanwhile, the RBA might cut rates next year if inflation remains stubborn.

The Fed’s rate cut outlook might change with next week’s data. Higher-than-expected durable goods orders and economic growth would lead to a decline in rate-cut expectations. The opposite is also true. 

AUD/USD Weekly technical forecast: Bears eye 0.6851 support after range breakout

AUD/USD Weekly technical forecastAUD/USD Weekly technical forecast
AUD/USD daily chart

On the daily chart, the AUD/USD price is declining after breaking out of consolidation. Initially, the price started a steep downtrend at the 0.6625 key level. However, it paused and moved sideways below the 0.6300 key resistance level. Moreover, it respected a support trendline and bounced higher every time it retested the level. 

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At the same time, the price kept breaking through the 22-SMA, showing a lack of direction. However, bears have confirmed the continuation of the previous downtrend with a break below the support trendline. Additionally, the price has fallen well below the 30-SMA and the RSI far below 50, indicating strong bearish momentum. 

This move might continue next week, with bears targeting the 0.6851 key support level.

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