Fundamental view:

The Australian dollar edged higher against its rival American dollar reaching a fresh 2022 high of 0.7379 this week. Aussie reaction was resilient to the war. Leaders from all the West’s nations have asked President Vladimir Putin to put a halt to the war, but of no use. On Thursday, Putin said that he aims to reach its goals and will continue no matter what. while Putin agreed on the creation of safe corridors to evacuate civilians, he persisted in bombing Ukrainian cities. It has impacted the financial markets adversely. The commodity linked currency was underpinned by the soaring raw material prices due to the war situation. And upbeat local data, which reflected a solid economic comeback, also favored the Aussie.

The country published the February TD Securities Inflation report on Monday, which printed at 3.5% YoY, which is much higher than the previous 2.8%. Moreover, Governor Philip Lowe and Co decided to maintain the cash rate at a record low of 0.1%.  Lowe said that “the global economy is continuing to recover from the pandemic. However, the war in Ukraine is a major new source of uncertainty,” another reason to wait before pulling the trigger. On the other side of the pound, Fed Chair Jerome Powell maintained his hawkish stance in testimony at the semi-annual monetary policy report, confirming a 25 bps rate hike next week while showing the Fed’s openness for a series of rate hikes over the year.

In this week, Commonwealth Bank Manufacturing PMI on 1^st March , Fed Chair Powell Testimony on 2^nd and 3^rd March created downtrend whereas Australia Retail Sales monthly report on 28^th February, Australia GDP quarterly report on 2^nd March and US ISM Non-Manufacturing PMI on 3^rd March created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are RBA Governor Lowe Speech, Australia NAB Business Confidence at Mar 08, US JOLTS Job Openings, US EIA Crude Oil Stocks Change, US WASDE Report at Mar 09, RBA Governor Lowe Speech, US Initial Jobless Claims, Federal Budget Balance at Mar 10 and Michigan Consumer Sentiment at Mar 11.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.31% higher than the previous week. Maintaining high at 0.7380 and low at 0.7162 showed a movement of 218 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 0.7443 may open a clean path towards 0.7520 and may take a way up to 0.7661. Should 0.7225 prove to be unreliable support, the AUDUSD may sink downwards 0.7084 and 0.7007 respectively. In H4 chart Ascending Triangle breakout favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.