AUD/USD is on the defensive meeting weekly resistance

AUD/USD meets weekly resistance that puts the focus on the downside for the week ahead.
Central bank divergence remains the driving force, US dollar is firming.

Ross J Burland FXStreet

AUD/USD ended the week on the back foot as it ran into a layer of weekly resistance just ahead of 0.73 the figure. Down some 0.8% on the day, the pair finished Friday's session at 0.7223 after travelling between a range of 0.7122 and 0.7184.

The Australian dollar was unable o maximise on the mid-week blockbuster employment data and was capped around 0.7223 the high for the week. The US dollar found a last-minute bid during a risk-off US session and the US Dollar Index finished the week above the 96.00 figure for the third week in a row.

Central banks were the driving force with the Bank of England surprisingly hawkish, the European Central bank more hawkish than expected and the Federal Reserve ramping up rate hike expectations also.

This leaves the Reserve Bank of Australia lagging in this regard and the divergence between the central banks is a weight on the currency. Having said that, the recent string of stronger data supports prospects for an end of QE at the start of the new year.

For instance, a 366k monthly increase in employment was twice as strong as expected, considerably stronger than the bounce in June 2020 and therefore the biggest gain on record. In this regard, the RBA minutes will be a key event for the currency this week and analysts at TD Securities explained that ''markets are likely to focus on QE discussions and their impact on the rate hike timeline.'' ''Governor Lowe's recent speech noted 3 criteria for the Bank's QE decision: 1) other CB actions, 2) bond market functioning, 3) actual and expected progress towards employment and inflation target goals.''

AUD/USD technical analysis

As illustrated, the price reached a 38.2% Fibonacci retracement level on the weekly time frame through 0.72 the figure and would be expected to struggle at this juncture. This could result in a meanwhile downside correction for the week ahead and potentially lead to a downside continuation for the medium term.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD looks weaker, focus is back to 0.7100

AUD/USD reverses Tuesday’s gains and retreats markedly toward four-day troughs in the low 0.7100s ahead of the opening bell in Asia. The firmer tone in the Greenback weighs on the risk complex amid unabated tensions on the US-Iran front, prompting the Aussie to shed part of recent gains and refocus on the downside. Moving forward, Australian trade balance results should entertain investors early on Thursday.

Japanese Yen bounces up from lows after Japan PM Takaichi’s intervention warnings

The Japanese Yen bounced up from five-week lows against the US Dollar, turning positive on the daily chart, as Japan’s Prime Minister Sanae Takaichi warned that Tokyo is ready to take action against Yen weakness. The USD/JPY pair has pulled back from the 160.00 level, considered a line in the sand for Japanese authorities, to hit session lows at 159.55.

Gold remains under bearish pressure, looks at $4,400

Gold keeps the offered stance well in place, retreating toward the $4,430 region per troy ounce, or four-day lows, on Wednesday. The yellow metal’s retracement comes in response to escalating tensions in the Middle East, which in turn continue to drive oil prices higher while reinforcing the idea of a tighter-for-longer Fed.

XRP eyes rebound despite muted ETF demand

Ripple (XRP) rebounds above $1.23 from support at $1.20 at the time of writing on Wednesday, as the broader cryptocurrency market pares losses triggered by escalating tensions in the Middle East. Appetite for risk assets remains generally low as the United States (US) and Iran exchange fire amid a fragile ceasefire and peace negotiations.

The upside-down math of debt

In 2010, Professors Carmen Reinhart and Kenneth Rogoff published a paper, Growth in a Time of Debt, which instantly went viral. The main thesis of the paper was that once a government's debt-to-GDP ratio crosses above 90%, a financial crisis and default are around the corner.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.