Fundamental view:

Aussie initially tried to rally but later fell hard against the greenback during the trading course of the week. The broad US dollar strength and return of covid and related lockdowns pushed the pair down. Austria instituted a partial lockdown and Germany imposed restrictions amid rising case counts that go against high vaccination rates in both countries. Meanwhile US Federal Reserve is moving towards rate hikes in 2022 whereas Reserve Bank of Australia (RBA) is expecting none. On Tuesday, RBA Governor Philip Lowe noted that  “the economy and inflation would have to turn out very differently from our central scenario for the Board to consider an increase in interest rates next year.” 

In this week, US Business Inventories monthly report on 16^th November and RBA Assistant Governor Ellis Speech on 18^th November created uptrend whereas US Initial Jobless Claims on 18^th November and  US EIA Crude Oil Stocks Change on 17^th November created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are US Markit Manufacturing PMI at Nov 23, US GDP quarterly report, US Core Durable Goods Orders monthly report, US Initial Jobless Claims, Michigan Consumer Sentiment, FOMC Minutes at Nov 24, Australia Private New Capital Expenditure quarterly report at Nov 25 and Australia Retail Sales monthly report at Nov 26.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.83% lower than the previous week. Maintaining high at 0.7370 and low at 0.7226 showed a movement of 144 pips.

In the upcoming week we expect AUD/USD to show a bearish trend. The currency pair is trading above the 100 Simple Moving Average and the MACD trades to the downside. A firm breakout below 0.7181 may make a fall to 0.7131 and then fall further to 0.7037. Should 0.7325 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7419 and 0.7469 respectively. In H4 chart formation of inverted cup and handle pattern favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.