WEEK AHEAD: AUD BULLS IN CONTROL AS USD TO CORRECT
Hello Friends! I bring you today’s analysis for the AUDUSD pair
AUDUSD 0.70 for the past few weeks are solid support and long is the only trade in my opinion.
The Australia dollar is struggling to convincingly reclaim the $0.70 handle following a six week long slide against the USD. The RBA has only started with its tightening cycle and the size of the rate increase in June is still up for debate. With a positive job report for April , the PMI’s report due on Tuesday could further support the case for a rate cut larger than 25bps in June if they indicate that business activity was little reduced in May from rising cost pressures and the lockdowns in China.
On Wednesday and Thursday, the focus will shift to first quarter data on Construction output, capital expenditure and preliminary retail sales numbers for April are out on Friday. Business spending had weakened substantially in the second half of 2021 due to Omicron so a strong pickup in the first three months of the year would signal that the recovery is now solid.
Australia’s Labour Party was set to end almost a decade of conservative rule as the government was swept away in Saturday’s election by a wave of support for candidates who campaigned for more action on climate change and May hold the balance of power. Risk Sentiment is constantly analyzing the likelihood of a recession
Reality might be creeping into the markets which until now were confident that the American economy is robust enough to avoid a sharp downturn. This sudden switch to a darker outlook has knocked down the USD and pushed Wall Street into the red. Investors will be hoping that Wednesday‘s Fed minutes can offer some clues about if the US Central Bank can curb the most hostile inflation conditions in four decades. Goldman Sachs strategies have predicted a 35% chance of the US economy entering into a recession in the next 2 years. 75bps have already entered the market with 50bps expected in June and July. The dollar fell for the week and a downside breakout looks likely.
On the Technical Side , AUDUSD approaches its big break at 0.7141 to then target 0.7200. Above 0.7200 the range shifts from 0.7200-0.7300.
This is an article not Financial Advice always do your own research
If you have questions you can write it in the comments below and I will answer them
And please don’t forget to support this idea with your likes and comments
AUDUSD 0.70 for the past few weeks are solid support and long is the only trade in my opinion.
The Australia dollar is struggling to convincingly reclaim the $0.70 handle following a six week long slide against the USD. The RBA has only started with its tightening cycle and the size of the rate increase in June is still up for debate. With a positive job report for April , the PMI’s report due on Tuesday could further support the case for a rate cut larger than 25bps in June if they indicate that business activity was little reduced in May from rising cost pressures and the lockdowns in China.
On Wednesday and Thursday, the focus will shift to first quarter data on Construction output, capital expenditure and preliminary retail sales numbers for April are out on Friday. Business spending had weakened substantially in the second half of 2021 due to Omicron so a strong pickup in the first three months of the year would signal that the recovery is now solid.
Australia’s Labour Party was set to end almost a decade of conservative rule as the government was swept away in Saturday’s election by a wave of support for candidates who campaigned for more action on climate change and May hold the balance of power. Risk Sentiment is constantly analyzing the likelihood of a recession
Reality might be creeping into the markets which until now were confident that the American economy is robust enough to avoid a sharp downturn. This sudden switch to a darker outlook has knocked down the USD and pushed Wall Street into the red. Investors will be hoping that Wednesday‘s Fed minutes can offer some clues about if the US Central Bank can curb the most hostile inflation conditions in four decades. Goldman Sachs strategies have predicted a 35% chance of the US economy entering into a recession in the next 2 years. 75bps have already entered the market with 50bps expected in June and July. The dollar fell for the week and a downside breakout looks likely.
On the Technical Side , AUDUSD approaches its big break at 0.7141 to then target 0.7200. Above 0.7200 the range shifts from 0.7200-0.7300.
This is an article not Financial Advice always do your own research
If you have questions you can write it in the comments below and I will answer them
And please don’t forget to support this idea with your likes and comments
