Fundamental view:

Australian dollar has rallied significantly against the American dollar and ended near the 0.7170 level during the trading course of the week. The pair has recovered from the a fresh 2021 low of 0.6992, this week. The Fed is widely anticipated to increase the amount of its monthly taper from $15 billion to $30 billion at the December 15 conclave. This would bring the end of the $120 billion program forward from June 2022 to April or March, depending on how the fractions are handled. On the other hand, The Reserve Bank of Australia (RBA) has decided to maintain the main rate on hold at a record low of 0.1% and has repeated it will review its bond-buying program in February 2022. However without changing its monetary policy stance, It is speculated that the strong economic comeback in the country could lead to a tapering announcement early next year. Despite, Governor Philip Lowe reiterated that “the board is prepared to be patient.”

EIA Cushing Crude Oil Stocks Change on 8^th December and CFTC AUD Non-Commercial Net Positions on 10^th December framed downtrend whereas  RBA Interest Rate Decision on 7^th December and Initial Jobless claims on 9^th December framed uptrend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are RBA Governor Lowe Speech, US Retail Sales monthly report, Fed Interest Rate Decision at Dec 15, Australia Employment Change, US Initial Jobless Claims, Fed Industrial Production monthly report at Dec 16, Fed Governor Waller Speech at Dec 17.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.20% higher than the previous week. Maintaining high at 0.7186 and low at 0.6995 showed a movement of 191 pips.

In the upcoming week we expect AUD/USD to show a bullish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 0.7237 may open a clean path towards 0.7307 and may take a way up to 0.7428. Should 0.7046 prove to be unreliable support, the AUDUSD may sink downwards 0.6925 and 0.6855 respectively. In H4 chart cup and handle pattern formation favors prospects of a bullish trend. Also to be noted hammer formation exerts the expectation of uptrend for the pair.