Fundamental view:

The Australian dollar made modest losses against its American dollar rival. The hawkish fed amidst the risk averse market sentiment due to the Ukraine uncertainty favored the US dollar. Whereas hawkish stance by the RBA favored the Aussie. The Fed unveiled the monetary policy this week. Minutes from last month’s Federal Open Market Committee (FOMC) meeting made the reduction plan concrete. “Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant,” stated the minutes.

On the other hand, RBA dropped the patient stance Lowe said “The main sources of uncertainty relate to the speed of resolution of the various supply-side issues, developments in global energy markets and the evolution of overall labor costs.”. Meanwhile, Policymakers also dropped their patient approach, and the removal of several key sentences from the central banks’ statement hinted at a possible rate hike in the upcoming meetings.  They also said that the next decisions would be based on inflation and labor cost data. Given the Australian Federal election in May, speculative interest is now pricing in a rate hike in June.

In this week, RBA Interest Rate Decision on 5^th April and EIA Crude Oil Stocks Change on 6^th April boosted uptrend whereas Australia S&P Global Services PMI on 5^th April , FOMC minutes on 6^th April and Initial Jobless claims on 7^th April boosted downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Australia NAB Business Confidence, Federal Budget Balance at Apr 12, Australia Employment Change, US Retail Sales monthly report, Initial Jobless Claims, Michigan Consumer Sentiment at Apr 14 and Fed Industrial Production yearly report at Apr 15.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.60% higher than the previous week. Maintaining high at 0.7660 and low at 0.7426 showed a movement of 234 pips.

In the upcoming week we expect AUD/USD to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. Should 0.7365 proves to be unreliable support then the pair may fall further to 0.7278 and 0.7131 respectively whereas a solid breakout above 0.7599 will open a clear path upward to 0.7746 and then will further raise up to 0.7833. In H4 chart descending triangle breakout favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.