Fundamental view:

The Australian dollar advanced against American dollar for a fourth consecutive week, trading at around 0.7220 as the week ended .The risk off market mood amid geopolitical jitters made the commodity-linked currency to shrugge off to 0.7283, its highest since mid-January. The market sentiment fluctuated alongside headlines related to the Ukraine-Russia crisis throughout the week. Russia invaded the Ukraine, claiming that Kyiv allying with NATO represents a security concern. Moscow’s military attack took over Chernobyl and reached the capital on Friday when Russia expressed willingness to send a delegation and discuss the possibility of Ukraine becoming neutral. Further geopolitical developments will be the major catalyst in the market.

In this week, Australia Construction Work Done quarterly report on 23^rd February and US GDP quarterly report on 24^th February favored downtrend whereas Commonwealth Bank Manufacturing PMI on 21^st February and CB Consumer Confidence Index on 22^nd February favored uptrend of the pair.

The major economic events deciding the movement of the pair in the next week are Australia Retail Sales monthly report at Feb 28, RBA Interest Rate Decision, US ISM Manufacturing PMI at Mar 01, Australia GDP quarterly report, US ADP Nonfarm Employment Change, Fed Chair Powell Testimony at Mar 02, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Mar 03 and US Nonfarm Payrolls at Mar 04.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.78% higher than the previous week. Maintaining high at 0.7283 and low at 0.7094 showed a movement of 189 pips.

In the upcoming week we expect AUD/USD to show a bearish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. Should 0.7116 proves to be unreliable support then the pair may fall further to 0.7010 and 0.6927 respectively whereas a solid breakout above 0.7305 will open a clear path upward to 0.7388 and then will further raise up to 0.7494. In H4 chart rising wedge pattern breakout downside favors prospects of a bearish trend. Also to be noted dark cloud pattern formation exerts the expectation of downtrend for the pair.