Fundamental view:

The Australian dollar initially fell during the course of the week but has turned around to show signs of strength again. The Australian currency was weighed by a sour sentiment that sent equities down. The poor sentiment was partially triggered by soft data indicating slow economic progress within the pandemic scenario, but also by an equities scandal that took by storm financial markets. Also On Wednesday, the U.S. Fed left the interest rate unchanged and stated that it would proceed with asset purchases at the current pace. The Fed’s commentary did not have a major impact on the market, and traders remained focused on selling riskier assets on fears about the continued negative impact of the second wave of the virus.

US HPI m/m & CB Consumer Confidence Index on 26^th January favored bullish trend and Australia CPI q/q & NAB Business Confidence on 27^th January, Australia Import Price Index quarterly report on 28^th January and US Core PCE Price Index on 29^th January favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Feb 01, RBA Interest Rate Decision at Feb 02, US ADP Nonfarm Employment Change, US ISM Non-Manufacturing PMI at Feb 03, RBA Governor Lowe Speech, US Initial Jobless Claims at Feb 04, and US Nonfarm Payrolls at Feb 05.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.24% lower than the previous week. Maintaining high at 0.7764 and low at 0.7592 showed a movement of 172 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 0.7569 may open a clean path towards 0.7495 and may take a way down to 0.7397. Should 0.7741 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7838 and 0.7913 respectively. In H4 chart bearish shark pattern favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.