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The AUD/USD weekly forecast points north as the Aussie gains on hopes of a US-China trade negotiation. 

Ups and downs of AUD/USD

The AUD/USD pair had a bullish week as the Australian dollar rose on hopes for a trade deal between the US and China. However, a rebound in the dollar kept a lid on gains.

During the week, both the US and China assumed softer stances on tariffs, raising hopes for a trade deal between the two countries. As a result, the outlook for China’s economy brightened, boosting the Australian dollar. At the same time, the dollar recovered from its steep losses. 

Next week’s key events for AUD/USD 

Next week, market participants will focus on key economic releases from Australia, which will provide insight into the state of inflation in the country. Meanwhile, the US will release GDP, business activity, and employment data. 

Economists expect inflation to accelerate by 0.8%, a jump from the previous reading of 0.2%. A bigger-than-expected reading will lower RBA rate cut expectations. Meanwhile, a downbeat report will support current expectations for more cuts.

In the US, traders will focus on the NFP report. Fed policymakers are waiting to see signs of economic weakness before starting to lower borrowing costs.

AUD/USD weekly technical forecast: Bulls test the range resistance zone

(Click on image to enlarge)

AUD/USD daily chart

On the technical side, the AUD/USD price has paused near the 0.6400 key resistance level. It trades above the 22-SMA and the RSI is above 50, suggesting solid bullish momentum. However, for a long time, the price has been trading in a range between the 0.6200 support and the 0.6400 resistance.

At the same time, there is support from the 0.236 Fib retracement. Meanwhile, on the upper side, the 0.5 Fib retracement acts as a solid resistance. Bears recently made a breakout, but it ultimately proved false as the price returned to the range area.

If bulls are strong, the price will break above the range resistance zone. Such a move would allow AUD/USD to retest the 0.6603 level. Moreover, it would likely start a new bullish trend. On the other hand, if the resistance holds firm, the price will remain in consolidation.

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