- US consumer and wholesale inflation data came in below estimates.
- The Fed has forecast just one rate cut this year.
- The Reserve Bank of Australia will hold a policy meeting next week.
The AUD/USD weekly forecast is slightly bearish as the greenback recovers on the prospect of one Fed rate cut in 2024.
AUD/USD Ups and Downs
The Aussie ended on a bullish candle, but closed well below its highs as the dollar rallied late in the week. During the week, investors focused on consumer and wholesale inflation numbers, which came in below estimates. Consequently, there was more confidence that the Fed would cut rates twice this year.
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However, the Fed had a hawkish outlook, and policymakers noted that the economy remained strong. As a result, the central bank has forecast just one rate cut this year. Therefore, although the dollar started the week down, it ended strongly, sending the AUD/USD price lower.
Next week’s key events for AUD/USD
Next week, the Reserve Bank of Australia will hold a policy meeting, likely to keep interest rates unchanged. Furthermore, investors will focus on the US retail sales report, which will show the state of consumer spending in the country.
The RBA is expected to maintain rates. However, the market’s focus will be on the messages after the meeting, which could indicate when the central bank will start cutting interest rates. Futures are currently showing a less than 50% chance of a December cut.
Meanwhile, the US retail sales report is unlikely to show growth for the month, boosting policymakers’ confidence that the economy is slowing.
AUD/USD Weekly Technical Forecast: Price fluctuates within 0.6580 support and 0.6701 resistance
On the technical side, the AUD/USD price is caught in a range between the support level at 0.6580 and the resistance level at 0.6701. However, bears show more strength in the range, with larger candles than bulls.
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Moreover, the price is below the 22-SMA, a sign that the bears are in the lead. The RSI also crossed below 50, supporting bearish momentum. Therefore, there is a good chance that the price will break below the support of the 0.6580 range. If this happens, it may fall further to retest the 0.6401 support level. The price will confirm the downtrend when it starts making lower highs and lows.
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