AUDUSD on Friday rose 1.19% to 0.67920. Week ending 2024-08-23 rose 1.78%. What’s going on.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	1.19%	80.1 Pips
Week 2024-08-23	1.78%	119 Pips	August	3.74%	245 Pips

Upcoming key events for the new week (London Time)

Wed 02:30 AM Monthly CPI Indicator (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM GDP annual rate
Fri 02:30 AM Retail Trade Turnover (seasonally adjusted) (1-mth)
Fri 01:30 PM PCE Price Index (excluding food and energy) (1-mth)
Fri 01:30 PM PCE Price Index (excluding food and energy) (12-mth)

What happened over the week

In the United States, Federal Reserve Chair Jerome Powell indicated potential interest rate cuts in September due to a cooling labor market and ongoing economic uncertainty during his speech at the Jackson Hole Symposium. This dovish stance aligns with the latest data from the Department of Labor, which reported an increase in initial unemployment insurance claims to 232,000 for the week ending August 17, compared to the previous figure of 228,000 (revised up from 227,000). These developments suggest a slowing U.S. economy, possibly prompting the Federal Reserve to initiate measures to stimulate growth.

Turning to Australia, key economic events are on the horizon, such as the Monthly CPI Indicator, Retail Trade Turnover (seasonally adjusted), and several reports from the U.S., including Initial Unemployment Insurance Claims, GDP annual rate, and the PCE Price Index for both month-to-month and year-to-year comparisons. Last week, the AUDUSD pair showed substantial activity, rising 1.19% to 0.67920 on Friday and gaining 1.78% over the week ending August 23, 2024.

The expectation of rate cuts from the Federal Reserve typically weakens the U.S. dollar since lower interest rates reduce the return on assets denominated in USD, making them less attractive to investors. Concurrently, this can strengthen the Australian dollar (AUD) relative to the USD, pushing the AUDUSD pair upwards. Given that the Federal Reserve is leaning towards a rate cut and the U.S. labor market appears to be cooling, it is likely that the AUD will continue to experience upward momentum against the USD. Nevertheless, upcoming data releases, particularly those related to inflation and economic performance in both the U.S. and Australia, will be crucial in determining the future direction of the AUDUSD pair.

From X (Twitter)

The Minutes of the June 2024 Monetary Policy Meeting of the Reserve Bank Board has been released: https://t.co/XYOHfOTnlk

— Reserve Bank of Australia (@RBAInfo) August 20, 2024

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

AUDUSD on Friday rose 1.19% to 0.68. Price is above 9-Day EMA while Stochastic is falling in overbought zone. For the week ending 2024-08-23, the pair rose 1.78% or 119 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 0.68 (WR1) with break above could target 0.69 (WR2). On the downside, we are looking at week low of 0.67 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.68 would suggest bullish bias after recent positive movement.

For the month of August, AUDUSD is up by 3.74% or 245 pips higher.

Weekly key levels to watch out:

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