AUD/USD Weekly Outlook

Two RBA speeches and a monetary policy decision along with updated RBA forecasts are the highlights of the week for AUD/USD traders on the domestic front. Although risk-off tones and an ISM services report could prove to be the bigger drivers.

AUD/USD may have snapped a 9-day losing streak, but it is on track for a bearish outside month. Which tend to be followed by further bearish months, looking at recent history.

I suspect we’ve entered a phase where politically-driven sentiment carries more weight than domestic data for AUD/USD. And with the VIX rising alongside political uncertainty, volatility could favour bears over the coming months as we head towards the US elections.

China's third plenum, New Zealand inflation and the Australian labour force report are potential drivers for AUD/USD this week.

Jerome Powell's testimony, RBA head of economics speech and US CPI all have the potential to drive AUD/USD next week. But looking at the strength of the Aussie's breakout, dips may look appealing to bulls.

Australia's uncomfortably high inflation report last week means there is a real risk the RBA could hike rates by 25 bp at their August meeting.

Price action remains choppy and challenging for AUD/USD traders on the daily timeframe or higher. This makes it better suited for intraday traders, or those seeking to trade the range by entering around the lows, exiting near highs or potentially fade into the for a move lower. It is not a glamorous way of trading, but for now we have clear levels AUD/USD is holding around.

AUD/USD suffered its worst day in five weeks on Friday after a strong NFP report saw the USD wipe out a week's worth of losses in just two hours.

Whilst it appears that tensions in the Middle East have receded, headline risks remain a threat that traders need to keep in mind this week. And if sentiment is allowed to recover, economic data such as the key inflation reports for Australia and the US will be allowed to make their mark on AUD/USD.

AUD/USD traders will keep an eye on NZ inflation figures next week to see if disinflationary forces are picking up pace, in hopes that it will provide a lead for Australia. But if Thursday's AU employment report continues to knock out decent figures, then an RBA cut remains to be a distant hope for the future.

Due to the shorter trading week, we take a look at how AUD/USD has performed around Easter over the past 30 years.