AUDUSD weekly forecast: Dangerous signs ahead. Client mood, the bear flag, and the AUDUSD death cross all point to more AUD weakening.

AUDUSD FUNDAMENTAL FRAMEWORK FOR THE AUSSIE

Following a very stable week with respect to price volatility vs the US dollar, the AUD enters the following week. The RBA has so far been having trouble with data from both domestic and foreign sources. Following choosing to suspend rates in the previous interest rate meeting.

The RBA’s interest rate likelihood has since been picked up by money markets to include another potential 25 bps hike in 2023. A substantial shift from a few days before, when no such hike was on the table. The most recent RBA minutes indicated that the window remains open to further hikes if needed.

The coming week will be filled with crucial economic data for the AUDUSD trend

The upcoming week will be filled with high-impact instances, most of which are tilted toward the US (economic schedule under). From an Australian viewpoint, Q1 inflation is anticipated to be less on both YoY and QoQ metrics. That might cause the above rate likelihood chart to swing back to no more raises if inflation is low.

Given the US GDP and the Fed’s favored inflation indicator (core PCE) scheduled for release this week. The US data, which has been scant in previous months, appears to be picking up again. It will be fascinating to watch how these factors—along with consumer confidence and durable goods—affect the latest hardline remarks from Fed officials.

Economic Activity Schedule for next week

Last week, an upbeat Chinese GDP helped commodities prices rise as demand projections were upgraded. However, since then, as global recessionary worries have gained a grip, things have become worse. Lower costs inevitably compress the local currency since exports of raw materials have such a big brunt on the Australian dollar.

Technical Analysis of AUDUSD

Together with the death cross from earlier this past week. The daily AUDUSD price movement has been building a bear flag-like charting formation. Such warning signs for the Australian dollar are concerning, but if the duo drops under the psychological support level of 0.6700, it could recover. The catalyst that either confirms or disproves the bear flag might be the basic data released next week.

Major resistance levels:

• 0.6800
• 0.6772

Major support levels:

• 0.6700
• Bear flag support
• 0.6620