Fundamental view:

Aussie fell against greenback in the last week. The Reserve Bank has surprised the markets with its latest monetary policy which has impacted positively. The central bank left the cash rate at 0.1% which was expected, along with that the 3-year bond yield target at the same level. The central bank had decided to maintain its previous decision to reduce its weekly bond-buying in September to A$4 billion per week, at least until mid-November. Whereas Policymakers reiterated that they do not expect to raise the cash rate until at least 2024.

US Markit Composite PMI on 4th August and US Initial Jobless Claims on 5th August created downtrend whereas Australia Commonwealth Bank Manufacturing PMI on 2nd August and Australia Building Approvals monthly report on 3rd August created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Australia NAB Business Confidence, US JOLTS Job Openings at Aug 09, US Nonfarm Productivity at Aug 10, Australia Westpac-MI Consumer Sentiment monthly report, Federal Budget Balance at Aug 11, US Initial Jobless Claims, US WASDE Report at Aug 12 and US Michigan Consumer Sentiment at Aug 13.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.18% higher than the previous week. Maintaining high at 0.7426 and low at 0.7328 showed a movement of 98 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 0.7311 may open a clean path towards 0.7271 and may take a way down to 0.7213. Should 0.7409 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7467 and 0.7507 respectively. In H4 chart diamond pattern breakout favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.