- Australia’s economic growth was the slowest in a year last quarter.
- US consumer confidence surprisingly fell in February.
- The Reserve Bank of Australia will raise interest rates by 25 basis points.
Weekly forecast for AUD/USD is marginally bullish as investors expect a rate hike from the Reserve Bank of Australia.
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AUD/USD ups and downs
The Australian economy grew at its slowest pace in the previous quarter as interest rates rose and inflation surged. All signs point to a further slowdown to come.
US consumer confidence surprisingly fell in February. But people were more optimistic about the labor market.
The number of Americans filing new applications for unemployment benefits fell again last week, signaling continued resilience in the labor market. This heightened fears in financial markets that the Fed would continue to raise interest rates for a prolonged period.
Economic data released on Friday revealed steady demand for services in the United States. S&P Global and Institute for Supply Management Purchasing Managers Index show activity in the sector is still growing. Activity in the manufacturing sector also rose.
These releases contributed to the pair’s bullish week.
Next week’s major events for AUD/USD
The focus of all next week will be the RBA conference. A Reuters poll showed the Reserve Bank of Australia was set to raise interest rates by another 25 basis points to his 3.60% on Tuesday and another 25 basis points in the next quarter before raising interest rates until next year. This results in higher peak rates than previously expected. Investors will also pay attention to US employment data.
AUD/USD Weekly Technical Forecast: Bearish Trend Likely to Continue Next Week
The daily chart shows AUD/USD in a downtrend indicated by the price below the 22-SMA and the RSI below the 50 mark. The bears took over when the price broke below the 22-SMA, retesting and lowering the lows.
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The bears are currently pausing at the 0.6702 support. The price is trading in a tight range and a deeper pullback is likely for the bulls to retest the 22-SMA and 0.6851 resistance levels.
After that, the price will respect the 22-SMA as resistance and may move down. The bears are about to break below his 0.6702 and make new lows. The next strong support level is at 0.6606.
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