AUD/USD forecast: Consumer sentiment, business confidence and Lowe’s speech in the spotlight

[MongiIG]

The AUD/USD battles pressure amidst RBA's decision to hold rates, while consumer confidence data and Governor Lowe's speech loom this week. The currency's trajectory is under watch.

 

Source: Bloomberg

 

Forex AUD/USD United States dollar Australian dollar Monetary policy Technical analysis

 Tony Sycamore | Market Analyst, Australia | Publication date: Monday 10 July 2023 

Anticipating key data and RBA Governor Lowe's speech

Under the duress of the RBA’s decision to hold rates steady and weak data from China early last week, the AUD/USD made a remarkable recovery on Friday, ending the week 0.5% higher at .6668.

The key events for the AUD/USD this week will be consumer and business confidence data as well as a speech by RBA Governor Lowe on Wednesday titled 'The Reserve Bank Review and Monetary Policy'.

Whilst the speech will likely focus on the potential impact of the Review on Monetary Policy, it will also be scrutinised for hints about what factors might prompt the RBA to act on its tightening bias next month and what factors might persuade the RBA to extend its pause.

AUD/USD technical analysis

The AUD/USD ended last week higher at .6688 (+0.50%) after a significant rebound on Friday as US non-farm payrolls increased less than anticipated, raising hopes of a cooling labour market.

Over the past fortnight, the AUD/USD has oscillated between .6600c and .6700c, with the upper resistance reinforced by the 200-day moving average at .6696. In the short term, whilst the AUD/USD remains below .6700c on a closing basis, we favour a retest of support at .6600/.6575.

We're mindful that should the AUD/USD rally above .6700c and hold above there for more than a day or two, it would likely see the AUD/USD extend the rally towards resistance at .6800/20.

In the medium term, after a false dip to the .6458 low in May and a false surge to the .6899 high in June, the AUD/USD appears to have returned to the safety of its multi-month .6575/.6820 range.

AUD/USD daily chart

 

Source: TradingView

 

• _{TradingView: the figures stated are as of July 10, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}