Fundamental view:

The Australian dollar has gone back and forth during the week. The greenback was the clear weekly winner, appreciating sharply against most of its major rivals. Aussie’s declines were limited by the equities positive momentum, as Wall Street flirted with record highs. Market players were optimistic amid progress in US President Joe Biden’s stimulus package. Biden proposed a $1.9 trillion which Republicans want to scale back. They counter-proposed a $600 billion package, yet, while negotiations continue, Senate Democrats pushed forward a budgetary manoeuvre that could allow them to pass Biden’s bill without Republicans’ support.

Australia ANZ Job Advertisements monthly report on 1^st Feb and US Nonfarm Productivity quarterly report on 4^th Feb created uptrend for the pair whereas Australia RBA Index of Commodity Prices yearly report on 1^st Feb and US ISM Non-Manufacturing PMI on 3^rd Feb created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Australia NAB Business Confidence, US JOLTS Job Openings at Feb 09, Australia HIA New Home Sales monthly report, US CPI monthly report, US EIA Crude Oil Stocks Change, Federal Budget Balance at Feb 10 and US Initial Jobless Claims at Feb 11.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.09% lower than the previous week. Maintaining high at 0.7679 and low at 0.7564 showed a movement of 115 pips.

In the upcoming week we expect AUD/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 0.7601 may open a clean path towards 0.7525 and may take a way down to 0.7486. Should 0.7716 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7755 and 0.7832 respectively. In H4 chart bearish bat pattern favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.