Fundamental view:

The Australian dollar formed a bearish rally against the American dollar this week. Australian central bank is very dovish, while the Federal Reserve is looking to taper bond purchases. US Federal Reserve is one of the few central banks that have already took action to reduce facilities. Moreover, Australia is stepping ahead into its national reopening plan, as over 86% of the population aged 16 or more has been fully vaccinated. According to a recent news, Australian Minister for Health and Aged Care, the newly discovered coronavirus variant that’s taking its toll on financial markets on Friday would not affect it., He further added that the developments would be closely monitored.  

Commonwealth Bank Services PMI on 23^rd November and US New Home Sales on 24^th November created uptrend whereas Markit Manufacturing PMI on 23^rd November and Australia Construction Work Done quarterly report on 24^th November created downtrend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Speech at Nov 29, RBA Private Sector Credit monthly report, US CB Consumer Confidence Index at Nov 30, Australia GDP quarterly report, US ADP Nonfarm Employment Change, ISM Manufacturing PMI, EIA Crude Oil Stocks Change at Dec 01 and Nonfarm Payrolls at Dec 03.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.35% lower than the previous week. Maintaining high at 0.7272 and low at 0.7109 showed a movement of 163 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 firm breakout below 0.7061 may make a fall to 0.7003 and then may take a way down to 0.6898. Should 0.7224 prove to be unreliable resistance, the AUDUSD may raise upwards to 0.7329 and 0.7387 respectively. In H4 chart descending scallop pattern favors prospects of a bearish trend. Further bearish harami formation exerts the expectation of downtrend for the pair.