- Inflation is pushing the RBA to increase interest rates.
- Low US GDP could push AUD/USD higher.
- The bears show possible weakness in the charts.
The AUD/USD weekly forecast is bullish as the pair closed on a solid bullish candle for the first time in about seven weeks. This bullish candle could start a bullish trend or a resting point for the bearish market. In addition, for the first time since November 2010, the Reserve Bank of Australia raised interest rates this month on May 3.
–Are you interested in learning more about British Trade Platform Review? Check our detailed guide-
Inflation is ailing many economies worldwide, Australia being one of them. A faster increase in inflation might force the RBA to go for an even more significant rate hike in June. This possibility favors the bulls as it could mean higher prices for AUD/USD in the coming days.
The previous week also saw the release of employment data—the unemployment rate held at 3.9%, as was expected. However, the number of people employed came in lower than expected. The low employment change signaled a reduction in consumer spending for April.
The dollar was weaker in the past week due to slow growth, which also gave AUD/USD bulls more strength, pushing the pair higher.
The week ahead for the AUD/USD
Some of the more important things investors will be paying attention to this coming week include the FOMC meeting minutes, which could make AUD/USD volatile.
The other significant event will be the GDP growth rate for the US, which is expected to come lower than the previous 6.9% at -1.4%. A reading lower than 1.4% could push AUD/USD higher as it is bearish for the dollar.
AUD/USD weekly technical forecast: Bulls benefiting from divergence
The daily AUD/USD chart tells the story of bears. The price has been trading below the 22-SMA while recent lows exceeded the 30 oversold levels. The slope shows that the trend is down. Will this trend continue? Are the bears still strong enough to take AUD/USD back below 0.7 and keep it there?
–Are you interested in learning more about buying NFT tokens? Check our detailed guide-
Looking at where the price closed, we see that it is in a crucial area. The 22-SMA could act as resistance, or the price could break above it and start moving higher.
The RSI has a bullish divergence that suggests bear weakness. This weakness might encourage the bulls to return to the playing field and get the pair back above 0.73. Let’s wait and see if the bias can turn upside down this coming week.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money