Fundamental view:

The Australian dollar has gone back and forth during the course of the week and finished the week with modest losses. Even though the greenback is having broad weakness, the AUD has failed to attract speculative interest of the traders.  The pair’s behavior has been directly correlated to that of Wall Street, which in turns moves only on sentiment. The US inflation and the government bonds yields remained the main decider in the market trend. News that some US policymakers are open to discuss a tighter monetary policy spurred an equities sell-off and pushed yields higher, giving the greenback a temporary respite.

The Reserve Bank of Australia also has published the Minutes of its latest meeting. Speculative interest was waiting for hints of a tighter monetary policy, as policymakers said that they would review it next July. 

US Housing Starts on 18^th May and US EIA Crude Oil Stocks Change on 19^th May favored uptrend whereas Australia Commonwealth Bank Services PMI on 21^st May and US Existing Home Sales & US Markit Manufacturing PMI on 21^st May favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Governor Brainard Speech at May 24, US CB Consumer Confidence Index at May 25, Australia Construction Work Done quarterly report at May 26, Australia Private New Capital Expenditure quarterly report, US GDP quarterly report, US Core Durable Goods Orders monthly report at May 27 and US Michigan Consumer Sentiment at May 28.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.97% lower than the previous week. Maintaining high at 0.7814 and low at 0.7711 showed a movement of 103 pips.

In the upcoming week we expect AUD/USD to show a bullish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 0.7788 may open a clean path towards 0.7852 and may take a way up to 0.7891. Should 0.7685 prove to be unreliable support, the AUDUSD may sink downwards 0.7646 and 0.7582 respectively. In H4 chart bullish gartley pattern favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.