Fundamental view:

Australian dollar traded low against the American dollar during the trading course of the week. The sour market sentiment and chances of further tightening in the US favored the American dollar. The discovery of Omicron variant created sour market sentiment. As per analysts, Omicron is more contagious, it is also less deadly. It is also unclear whether existing vaccines are effective against it, however at this time. several countries suspect that the variant has been locally circulating before it was actually reported. Overall, authorities have ended the week saying that travel restrictions are not the best way to fight the virus. Elsewhere, US Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, testified on the CARES act before the Senate. Powell noted that inflation had spread more broadly and that the risk of persistent inflation has risen. He added that it’s time to remove the term “transitory” to describe price pressures, and the Fed would discuss speeding up tapering in their December meeting, to counter inflation. On the other hand, The RBA will meet on Tuesday.

RBA Deputy Governor Debelle Speech on 30^th November and Commonwealth Bank Services PMI on 3^rd December favored uptrend whereas Fed Chair Powell Testimony on 30^th November and US ISM Manufacturing PMI on 1^st December favored bearish trend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are RBA Interest Rate Decision, US Nonfarm Productivity quarterly report at Dec 7, RBA Governor Lowe Speech, EIA Crude Oil Stocks Change at Dec 08, Initial Jobless Claims at Dec 09, Michigan Consumer Sentiment and US Federal Budget Balance at Dec 10.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.39% lower than the previous week. Maintaining high at 0.7172 and low at 0.6992 showed a movement of 180 pips.

In the upcoming week we expect AUD/USD to show a bearish trend. The currency pair is trading below the Simple Moving Average and the MACD trades to the downside. Should 0.6935 proves to be unreliable support then the pair may fall further to 0.6874 and 0.6755 respectively whereas a solid breakout above 0.7115 will open a clear path upward to 0.7234 and then will further raise up to 0.7295. In H4 chart descending scallop pattern favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.