- The Reserve Bank of Australia kept rates unchanged, maintaining its cautious tone.
- Trump’s victory was bullish for the dollar as his policies could raise inflation and interest rates.
- The US central bank lowered interest rates by 25 basis points.
The weekly AUD/USD forecast suggests expectations of higher US inflation that could keep the dollar strong. Meanwhile, Trump’s victory is already pushing the dollar higher.
AUD/USD Ups and Downs
The Aussie fluctuated this week but ended lower as the dollar strengthened following Trump’s presidential victory. The week began with the Reserve Bank of Australia’s policy meeting. The central bank kept rates unchanged, maintaining its cautious tone.
–Are you interested in learning more about low spread forex brokers? Check out our detailed guide-
After that, the US election came into focus. Trump’s victory was bullish for the dollar as his policies could raise inflation and interest rates. The last major event was the FOMC policy meeting, where the US central bank cut interest rates by 25 basis points.
Next week’s key events for AUD/USD
Next week, market participants will focus on US inflation and retail sales data. Meanwhile, Australia will release data showing the country’s employment situation. Economists expect US consumer inflation to remain at 0.2%. Similarly, core consumer inflation is likely to rise by 0.3%, mirroring the previous month’s increase.
A larger-than-expected increase in inflation will reduce expectations for a Fed rate cut in December, boosting the dollar. On the other hand, if inflation is soft, it will solidify bets for a December rate cut.
Meanwhile, Australia’s labor market has remained strong, making the RBA cautious about rate cuts. Another blockbuster report will support the Aussie and throw off bets on the first RBA rate cut.
AUD/USD Weekly Technical Forecast: Downtrend holds firm, with next target at 0.6501
From the technical side, AUD/USD the price broke through a key resistance zone, but failed to sustain growth. The price recently switched from an uptrend to a downtrend when the bears made a lower low below the key 0.6650 level. After that, the bulls tried to regain control by breaking above the 0.6650 level and the 22-SMA. However, the price quickly reversed as the bearish momentum grew.
–Are you interested in learning more about AI trading brokers? Check out our detailed guide-
If the bears remain in control next week, the price is likely to retest the 0.6501 support level. A break below this level would solidify the bearish bias as the price would make a lower low. Another support level to watch is 0.6350. On the other hand, the bulls could make another attempt at the 22-SMA. A break above would indicate a change in sentiment to bullish.
Do you want to trade Forex now? Invest in eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
