Fundamental view:

The Australian dollar fell against the American dollar for the second consecutive week. Market was  priced in the US Federal Reserve’s aggressive monetary policy stance which weighed on the Aussie. Market sentiment was sour amidst a coronavirus outbreak in China, leading to local lockdowns and the Eastern European crisis. President Vladimir Putin has said that diplomatic talks are at a dead-end, as Kyiv has broken the agreement reached in Turkey. Attacks continue, and western nations keep piling up sanctions on Russia. The Ukraine crisis led to the rise of commodity prices which helped the Commodity linked currency Aussie.

The Fed policymakers reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet .New York Fed President John Williams said that a half-point hike at the May 4 meeting  was a “very reasonable option” but that the pace of increases depends on the economy. Meanwhile, the Australian data was mixed this week.

In this week, Australia NAB Business Confidence on 12^th April and Australia Employment Change and US Initial Jobless Claims on 14^th April  boosted bullish trend whereas FOMC Member Williams Speech on 11^th April and Westpac-MI Consumer Sentiment monthly report on 13^th April boosted bearish trend.

The major economic events deciding the movement of the pair in the next week are RBA Meeting Minutes, US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, Australia S&P Global Manufacturing PMI, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21 and US S&P Global Manufacturing PMI at Apr 22. 

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 2.18% lower than the previous week. Maintaining high at 0.7493 and low at 0.7388 showed a movement of 105 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. Should 0.7362 proves to be unreliable support then the pair may fall further to 0.7322 and 0.7257 respectively whereas a solid breakout above 0.7467 will open a clear path upward to 0.7532 and then will further raise up to 0.7572. 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.