Fundamental view:

The Australian dollar has rallied a bit during the course of the trading week but within a relatively tight range and traded around 0.7260 level at the end of the week. Last week, Announcement from Prime Minister Scott Morrison after a national emergency cabinet meeting favored the Australian dollar. He announced a federal definition for close contacts without establishing tighter measures. Moreover, In many part of Australian, close contacts and confirmed cases have to isolate for seven days and take a rapid antigen test on day six. Meanwhile, Western Australia will maintain its current rules, while those new rules announced on Thursday apply everywhere else. On the other hand, Aussie dollar is highly sensitive to the Chinese economy, which has a lot of concern around it at the moment.

In this week, CFTC AUD Non-Commercial Net Positions on 27^th December and US Continuing Jobless Claims on 30^th December created downtrend whereas S&P/CS Composite-20 HPI yearly report on 28^th December and US pending Home sales on 29^th December favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, RBA Index of Commodity Prices monthly report, US ISM Manufacturing PMI at Jan 04, Australia Commonwealth Bank Services PMI, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change, FOMC Minutes at Jan 05, Initial Jobless Claims at Jan 06 and US Nonfarm Payrolls at Jan 07.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.33% higher than the previous week. Maintaining high at 0.7276 and low at 0.7205 showed a movement of 71 pips.

In the upcoming week we expect AUD/USD to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 0.7289 may open a clean path towards 0.7318 and may take a way up to 0.7360. Should 0.7218 prove to be unreliable support, the AUDUSD may sink downwards 0.7176 and 0.7147 respectively. In H4 chart bullish shark pattern favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.