Fundamental view:

Australian dollar traded high against the US dollar and partially recovered its previous week losses and ended around 0.7050 level. The uptrend of the pair can be related to the broad US dollar weakness and the rate hike from BOE and hawkish monetary policy from ECB. US central bank’s policymaker’s hesitance on the rate hike along weak US ADP data weighed on the US dollar.

On the other hand, The Reserve Bank of Australia decided to maintain rates at record lows and kept the monetary policy unchanged in its February meeting. The statement published by the end of the week showed that “the Board judged that it is too early to conclude that inflation is sustainably in the target range,” And this dovish stance prevented the AUD/USD rally despite the broad dollar’s weakness. However, the favorable NFP data showing a record of 457k which is triple of 150 which is very high than the expectation of -192k helped the US dollar to gain strength on Friday.

In this week, Commonwealth Bank Manufacturing PMI on 1^st February and Nonfarm Payrolls on 4^th February favored bearish trend whereas Australia Home Loans monthly report on 1^st February, US ADP Nonfarm Employment Change on 2^nd February and Australia Building Approvals monthly report on 3^rd February favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Australia Retail Sales quarterly report at Feb 07, Australia NAB Business Confidence at Feb 08, US EIA Crude Oil Stocks Change, US WASDE Report at Feb 09, RBA Governor Lowe Speech, Initial Jobless Claims, Federal Budget Balance at Feb 10 and Michigan Consumer Sentiment at Feb 11.  

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.28% lower than the previous week. Maintaining high at 0.7167 and low at 0.6985 showed a movement of 182 pips.

In the upcoming week we expect AUD/USD to show a bullish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout above 0.7160 may open a clean path towards 0.7255 and may take a way up to 0.7342. Should 0.6978 prove to be unreliable support, the AUDUSD may sink downwards 0.6891 and 0.6796 respectively. In H4 chart, Formation of bullish alt bat pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish harami formation braces our expectation.