AUDUSD on Friday rose 0.77% to 0.66660. Week ending 2024-08-16 rose 1.46%. What’s going on.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.77%	50.9 Pips
Week 2024-08-16	1.46%	96.2 Pips	August	1.82%	119 Pips

Upcoming key events for the new week (London Time)

Tue 02:30 AM RBA Meeting Minutes
Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 03:00 PM Jackson Hole Symposium
Fri 03:00 PM Federal Reserve Chair Jerome Powell speech (Jackson Hole Symposium)

What happened over the week

In the United States, the August flash estimate for the Michigan Index of Consumer Sentiment improved to 67.8 points, up from 66.4 in July (Source: University of Michigan). Housing data showed declines, with U.S. Housing Starts falling to 1.238 million in July from 1.353 million in June and Building Permits decreasing to 1.396 million from June’s revised 1.454 million (Source: Census Bureau). In contrast, Retail Trade saw a positive shift, rising to 1% in July after being flat in June. Additionally, Initial Unemployment Insurance Claims for the week ending August 10 dropped to 227K from a revised 234K previously (Source: Department of Labor). The U.S. Consumer Price Index (CPI) Inflation Rate rose to 0.2% in July from -0.1% in June, though the year-over-year rate edged down to 2.9% from 3% (Source: Bureau of Labor Statistics). The Producer Price Index excluding Food & Energy went down to 0% from a revised 0.3%, and the 12-month PPI decreased to 2.2% from 2.7% (Source: Bureau of Labor Statistics).

In Australia, labor market indicators showed positive momentum, with the Monthly Employment Change rising to 58.2K in July from a revised 52.3K in June and the Full-Time Employment increasing to 60.5K from 43.3K (Source: Australian Bureau of Statistics). The participation rate also improved to 67.1% in July from 66.9% in June. However, the Unemployment Rate ticked up slightly to 4.2% from 4.1% (Source: Australian Bureau of Statistics). The Wage Price Index for Q2 dipped to 0.8%, revised down from 0.9% (Source: Australian Bureau of Statistics).

The mixed economic data from the United States and Australia has had varied impacts on the AUDUSD exchange rate. The positive data from Australia, notably in employment and participation rate, has lent support to the Australian Dollar. Meanwhile, the U.S. data paints a mixed picture; while consumer sentiment and retail sales showed improvement, the decline in housing starts, building permits, and cooling inflation indicators like CPI and PPI suggest a more tempered economic outlook. These mixed indicators likely led to a reassessment of economic prospects and interest rate expectations, resulting in the Australian Dollar strengthening against the U.S. Dollar. The AUDUSD rose by 0.77% on Friday to 0.66660, capping a weekly gain of 1.46% for the week ending August 16, 2024. This movement reflects a market reaction to comparative economic fundamentals and interest rate outlooks between the two nations.

From X (Twitter)

“The unemployment rate rose to 4.2% in July, with the number of unemployed growing by 24,000 people and employed by around 58,000," Kate Lamb, ABS head of labour statistics

Visit https://t.co/pzJiW3Yqo9 pic.twitter.com/hfe1bqDMvi

— Australian Bureau of Statistics (@ABSStats) August 15, 2024

What can we expect from AUDUSD for the new week and what happened on Friday?

AUDUSD on Friday rose 0.77% to 0.67. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-08-16, the pair rose 1.46% or 96.2 pips higher.

Looking ahead, AUDUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 0.67 (WR1) with break above could target 0.67 (WR2). On the downside, we are looking at week low of 0.66 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.67 would suggest bullish bias after recent positive movement.

For the month of August, AUDUSD is up by 1.82% or 119 pips higher.

Weekly key levels to watch out:

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