Fundamental view:

The AUD/USD pair has extended its 2020 rally to 0.7449 this week, ending it a handful of pips below it. The Australian dollar has been steadily but painfully advancing against its American rival, and the main reason behind it seems to be the tepid tone of equities. Good news flooded Australia this week, as the country is officially out of recession, as the Q3 Gross Domestic Product surged by 3.3% QoQ, beating expectations. Even further, the country seems to have coronavirus under control while the US reaches grim record contagions and deaths. Victoria has gone over a month without new contagions, while there were no new cases reported in South Australia. The country has reported less than 20 cases per day in the last two weeks. Restrictions are slowly being lifted, and the economy is moving into normal.

In the past week,Australia Company Operating Profits on 30^th Nov and US Factory Orders monthly report on 4^th Dec created a bearish atmosphere whereas Australia Building Approvals monthly report on 1^st Dec and US ADP Non-Farm Employment Change on 2^nd Dec created bullish atmosphere for the pair.

The major economic events deciding the movement of the pair in the next week are NAB Business Confidence, US Nonfarm Productivity quarterly at Dec 08, US JOLTS Job Openings at Dec 09, RBA Bulletin, Initial Jobless Claims at Dec 10, and US CPI monthly report at Dec 11.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.68% higher than the previous week. Maintaining high at 0.7449 and low at 0.7338 showed a movement of 111 pips.

In the upcoming week we expect AUD/USD to show a bearish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 0.7363 may open a clean path towards 0.7295 and may take a way down to 0.7252. Should 0.7473 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7517 and 0.7584 respectively. In H4 chart bearish butterfly pattern favors prospects of a bearish trend. Also to be noted three inside down pattern formation exerts the expectation of downtrend for the pair.