Fundamental view:

Like every other rival, Australian dollar also had a good time against the US dollar during this week. The quote reached 0.7313, a fresh two-month high. The American dollar fell after the country confirmed the December  Consumer Price index came out at a four-decade high of 7% YoY. Moreover, the country released December Retail Sales that was much worse than anticipated, falling by 1.9% MoM. Elsewhere, The core reading, Retail Sales Control Group, declined to -3.1%. Amidst all the catalysts, the dollar was under pressure. On the other hand, Inflation in Australia dropped to 2.8% year on year in December from 3.1% year on year, while retail sales rose to 7.3% year on year in November, beating the expected 3.9%. The upbeat Australian data favored the Aussie.

In this week, Fed Chair Powell Testimony on 11^th January and CFTC AUD Non-Commercial Net Positions on 14^th January favored downtrend whereas Australia Retail Sales monthly report on 11^th January, US CPI monthly report on 12^th January and Australia Home Loans monthly report on 14^th January favored uptrend.

The major economic events deciding the movement of the pair in the next week are Australia Westpac-MI Consumer Sentiment monthly report, US TIC Net Long-Term Transactions at Jan 18, US Building Permits at Jan 19, Australia Employment Change, Initial Jobless Claims, EIA Crude Oil Stocks Change at Jan 20 and Baker Hughes US Oil Rig Count at Jan 21.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.51% higher than the previous week. Maintaining high at 0.7313 and low at 0.7148 showed a movement of 165 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 0.7295 may open a clean path towards 0.7386 and may take a way up to 0.7460. Should 0.7130 prove to be unreliable support, the AUDUSD may sink downwards 0.7056 and 0.6965 respectively. In H4 chart rounding bottom pattern favors prospects of a bullish trend. Also to be noted Bullish harami formation exerts the expectation of uptrend for the pair.