Weekly AUD/USD Analyses
Technical look for the AUD / USD
On a weekly basis, the AUD / USD is facing downside risk, but it will need to break down below the April low of 0.7531 to confirm a fresh move south. The head and shoulders pattern is still intact, with a potential 450 pips lower on the breach of the bearish neck area. During the mentioned time frame, the pair developed for the second week in a row below its still bullish 20 SMA. The Momentum indicator continued its decline below its 100 line, maintaining its bearish slope, while the RSI indicator lost directional strength, and is currently consolidating around 55.
On the daily chart, risk remains biased towards the downside. The pair cannot advance beyond the 20 and 100 SMA, which are converging in the 0.7660 / 80 price zone, with the shorter able to cross below the longer one. Technical indicators remain within negative levels, swing within familiar levels, and move slightly down.
0.7530 / 60 area provides support, and break below encourages expansion towards 0.7450. On the upside, the pair needs to go first at 0.7710, then 0.7770 to return to the upside.
Fundamental Analyses Of AUD/USD
The dollar traded weak after upbeat employment data spurred demand for riskier assets at the expense of the US dollar and government bond yields.
The Reserve Bank of Australia held a monetary policy meeting, but, as many expected, the central bank kept its three-year interest rate and return target at 0.10%. The accompanying statement confirms that policy makers do not expect to change interest rates until at least 2024, noting that "the economy is operating at a large surplus capacity and unemployment is still very high."
RBA note: The central bank is concerned about rising housing prices. The central bank noted: "The rise in home prices (and to a lesser extent, housing loans) has accelerated significantly in recent months and is being closely monitored by regulators." Policymakers are watching the housing market closely after years of working to prevent a bubble in the sector.
Across the Pacific, the US Federal Reserve had a lot to say about monetary policy these days. The Fed released the minutes of its latest meeting, which shows that politicians have agreed to keep current policies unchanged. The document showed that although they are aware of economic progress, they remain cautious and will pursue a very loose monetary policy until "more substantial progress" is made toward the Fed's inflation and employment targets. The slowdown in growth has not yet been considered due to uncertainty about real GDP growth and employment prospects remain high.