AUD/USD Weekly Outlook

AUD/USD has done a poor job of tracking its seasonality overall this year so far. And given it’s taking its directional cue from China while any pullback on the USD may be limited, I'm not hanging my hat on a particularly strong December for AUD/USD.

AUD/USD managed to recoup some of its post-US-election losses last week. And given it held up against the might USD strength while futures data shows volumes rising for the first week in seven, I suspect an important swing low has been seen.

AUD/USD snapped a 5-week losing streak with a marginal 0.3% gain. But it was the most volatile week since April thanks to the US election, and volatility is expected to remain elevated.

Election week is finally upon us, and could even supersede the FOMC meeting given its implications for global trade depending on who wins the race to the Whitehouse. And that puts AUD/USD in the crosshairs of volatility.

The selloff on AUD/USD extended into its fourth week, and closed beneath the 200-day average on Friday. The Aussie shows the potential to fall for a fifth week, should Trump continue to gain traction in election polls and US data outperforms.

AUD/USD may have finished lower for the third week, but another bumper employment report and reduced bets of easing shook some Aussie bears out of their positions around the 200-day SMA on Thursday and Friday.

We could be in for some choppy trade for AUD/USD this week given the lack of top-tier data from the US and Australia, and the fact we've already seen a decent mover lower on the pair. Unless Australia's employment figures deliver a curveball.

The USD is surging and markets are betting that the RNZZ could cut rates by 100bp by December. Failure to do hint at such a move could see AUD/NZD track AUD/USD lower.

AUD/USD rose for a second week, and it was also the strongest FX major of the week. With momentum on good terms with bulls, they may be looking to buy dips in anticipation of a break above 67c.

The late-week recovery which saw AUD/USD break a 3-week losing streak was impressive, given the 170-pip plunge we were treated to last Monday. We're now looking for dips and a break above its 200-day average.

Two RBA speeches and a monetary policy decision along with updated RBA forecasts are the highlights of the week for AUD/USD traders on the domestic front. Although risk-off tones and an ISM services report could prove to be the bigger drivers.

AUD/USD may have snapped a 9-day losing streak, but it is on track for a bearish outside month. Which tend to be followed by further bearish months, looking at recent history.

I suspect we’ve entered a phase where politically-driven sentiment carries more weight than domestic data for AUD/USD. And with the VIX rising alongside political uncertainty, volatility could favour bears over the coming months as we head towards the US elections.

China's third plenum, New Zealand inflation and the Australian labour force report are potential drivers for AUD/USD this week.

Jerome Powell's testimony, RBA head of economics speech and US CPI all have the potential to drive AUD/USD next week. But looking at the strength of the Aussie's breakout, dips may look appealing to bulls.

Australia's uncomfortably high inflation report last week means there is a real risk the RBA could hike rates by 25 bp at their August meeting.

Price action remains choppy and challenging for AUD/USD traders on the daily timeframe or higher. This makes it better suited for intraday traders, or those seeking to trade the range by entering around the lows, exiting near highs or potentially fade into the for a move lower. It is not a glamorous way of trading, but for now we have clear levels AUD/USD is holding around.