- The dollar got a boost thanks to an upbeat jobs report.
- The Central Bank of Australia kept interest rates unchanged on Tuesday.
- Investors are eagerly awaiting the FOMC’s policy meeting.
There is a hint of bearishness in the weekly AUD/USD forecast as the greenback recovers after an upbeat jobs report. This recovery could spill over into next week.
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AUD/USD Ups and Downs
AUD/USD had a bearish week as the Australian dollar was vulnerable after the RBA meeting. Meanwhile, the dollar got a boost thanks to an upbeat jobs report. As expected, Australia’s central bank kept interest rates unchanged on Tuesday. This decision gives the bank additional time to assess the state of the economy and decide whether to implement further tightening next year.
Meanwhile, in the US, employment data earlier this week pointed to a weakening labor market. However, the most important NFP report showed that employment growth increased while unemployment fell. So there is still strength in the labor market, which boosted the dollar on Friday.
Next week’s key events for AUD/USD
Next week, the US will release key inflation and retail sales reports. Additionally, investors are eagerly awaiting the FOMC’s policy meeting. Meanwhile, Australia will release employment data.
The U.S. Consumer and Producer Price Index reports will show the state of consumer and wholesale price growth. This will have a huge impact on the Fed’s policy meeting. In particular, recent data supports the view that the Fed is done raising interest rates. Therefore, falling inflation could increase bets on a rate cut.
At the FOMC meeting, market participants expect the Fed to keep rates at current levels. However, they will focus on the post-meeting statement to indicate what the Fed will do going forward.
AUD/USD weekly technical forecast: Bulls face resistance at 0.618 fib
On the technical side, AUD/USD is in a bullish trend. The price closed above the 22-SMA and the RSI is above 50. Moreover, the price respected the 22-SMA as a support, making a strong bullish candle from the level. Consequently, the price made a higher high and low, showing a bullish trend.
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However, the price is also retracing the last downtrend. It reached the key fib level of 0.618 which could reverse the current move. Moreover, resistance at the key level of 0.6702 could also stop the bullish move. The bullish trend could continue next week. However, a strong resistance zone could reverse the move.
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