Fundamental view:

AUD has rallied against greenback in the past week. The Aussie is continuing to benefit from the outperformance from building optimism over the global growth outlook which is helping to improve Australia’s terms of trade. The RBA noted earlier this week that the trade-weighted Aussie would normally be expected to be around 5% higher based on higher commodity prices, but the upside trend was disturbed  by the RBA’s loose policy stance. Still yields have risen sharply in Australia with the 10-year government bond yield rising back above 1.4% from just below 1.0% at the start of this year.

US NY Fed Empire State Manufacturing Index on 16^th Feb and US TIC Net Long-Term Transactions on 17^th Feb favors bearish atmosphere for the pair whereas US Housing Starts & US Housing Starts on 18^th Feb and Australia Retail Sales on 19^th Feb favors bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Testimony, US CB Consumer Confidence Index at Feb 23, Australia Wage Price Index quarterly report, Fed Chair Powell Testimony at Feb 24, Australia Private New Capital Expenditure quarterly report, US GDP quarterly report, US Core Durable Goods Orders monthly report, and US Initial Jobless Claims at Feb 25.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.35% higher than the previous week. Maintaining high at 0.7877 and low at 0.7724 showed a movement of 153 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 0.7923 may open a clean path towards 0.7976 and may take a way up to 0.8075. Should 0.7770 prove to be unreliable support, the AUDUSD may sink downwards 0.7671 and 0.7617 respectively. In H4 chart bullish shark pattern favors prospects of a bullish trend. Also to be noted Bullish hammer formation exerts the expectation of uptrend for the pair.