• Trade tensions between the US and China will finally take their toll on the pair.
  • Chinese trade figures and Australian inflation taking center stage.
  • AUD/USD bullish case backed by sentiment, critical resistance at around 0.6900.

The AUD/USD pair is closing the week with gains, despite there were not enough good news in Australia, neither in the trade war front. The FX market was all about the American dollar and its weakness, triggered by the market’s disappointment. The US and China had continued to report “progress” in talks, and US President Trump tweeted things are going “well.” But words fell short of convincing speculative interest, mainly considering the next round of tariffs on Chinese goods should come into effect next December 15.

Still, is not only about the US and China. These last days, US President Trump announced levies on base metals coming from Brazil and Argentina and menaced to impose tariffs of 100% on up to $2.4B worth of French goods.

Would or would not be a trade deal next week? Well, if there isn’t, risk aversion will keep on leading the way, but the dollar’s safe-haven condition will likely continue to be ignored. Still, if tensions mount between the two world’s largest economies, the Australian economy will also suffer. The AUD/USD pair won’t be able to rally just on the broad dollar’s weakness.

A better-than-expected US employment report didn’t help the greenback at the end of the week, as soaring Wall Street offset its effect on the pair.

Australian data not helping, could Chinese numbers do the job?

Equities collapsed throughout the first half of the week, recovering just marginally at the end of it, but the Aussie remained strong. The RBA had a monetary policy meeting on Tuesday, and as expected, policymakers left the main rate on hold at a record low of 0.75%. Governor Lowe was more confident than anticipated, saying that the housing market is responding to the latest rate cuts, an encouraging comment that kept the local currency underpinned. The enthusiasm faded the next day, when the country released Q3 GDP figures, as the economy grew by 0.4% in the three months to September, missing the market’s expectations and below the previous.

In the meantime, China will report its November trade figures, which could trigger some weekly opening gaps, as the numbers will be out on Sunday. On Tuesday, the country will release November inflation figures, while Australia will release the NAB’s Business Confidence Index, foreseen at 0 from 2 in the previous month. The most relevant figure coming from the country will be December Consumer Inflation Expectations, to be out on Thursday.

AUD/USD Technical Outlook

The weekly chart for the AUD/USD pair shows that it is finishing the week above its 20 SMA in the 0.6840 price zone, a few pips below its weekly high and the 61.8% retracement of its latest slump at 0.6865, the immediate resistance. Technical indicators in the mentioned chart head north, the Momentum about its 100 level an at levels last seen in February, but the RSI still below its mid-line. The risk is skewed to the upside, but the pair would need to clear the mentioned resistance, to extend gains toward the 0.6900/30 price zone.

In the daily chart, the pair is offering a neutral-to-bullish stance, as technical indicators hold within positive levels, but lacking the strength needed to confirm a bullish continuation. In this last time-frame, the 20 and 100 DMA converge with bearish slopes at around 0.6810. Below this last, the pair has a strong support at around 0.6770, with the bearish case becoming firmer with a break below this last

AUD/USD sentiment poll

The FXStreet Forecast Poll indicates that speculative interest continues favoring the Aussie against its American rival, as the pair is seen bullish or neutral in the next three months.  In the three time-frame under study, the pair is seen on average around 0.6850, although the Overview chart is painting a different picture as all of the moving averages recovered their upward slopes, clearer in the monthly perspective.

Related Forecasts:

EUR/USD Forecast: Mrs Lagarde’s debut could shake the foundations

GBP/USD Forecast: Buy the Boris rumor, sell the fact? Jingle polls make or break moment

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD stabilizing as US coronavirus cases continue to climb

EUR/USD is trading around 1.1250, pressured amid concerns about the spread of coronavirus in the US. Traders are digesting the upbeat Non-Farm Payrolls figures already out ahead of the long US weekend. 


GBP/USD attempting a bounce amid thin liquidity

GBP/USD is closer to 1.25, off the lows. Top-level EU-UK Brexit talks have been postponed until next week amid disagreements. The UK is continuing to reopen while US coronavirus cases are surging. 


Bitcoin must endorse the time of Ethereum has come

The crypto market remains in a choke point, and after signs of a possible upward shift yesterday, the market was once again disappointed to see Bitcoin in the low range of the $8900 to $9000 choke point.

Read more

Gold: There is a bearish signal on the 4-hour chart

Price action has been slow on Friday due to the bank holiday in the US as the nation celebrates independence day. This week has been an interesting one as there has been some good economic data but some very bad coronavirus news in the US. 

Gold News

S&P 500: Futures struggle to refresh two-week top

S&P 500 Futures prints mild loss of 0.10% while declining to 3,126 during the initial hour of Tokyo session on Friday. In doing so, the risk barometer fails to extend the previous four-day winning streak.

Read more

Forex Majors