AUD Weekly Forecast (May 18 – 22)

AUD Weekly Forecast (May 18 – 22)

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Not a lot of top-tier news from Australia this week, but it doesn’t mean that we won’t see volatility.

I’ve listed the economic themes that you have to pay attention to.

Check it out!

RBA’s meeting minutes (May 19, 1:30 am GMT)

  • The Reserve Bank of Australia (RBA) maintained its interest rates at 0.25% as expected in May
  • RBA members see GDP at 6% in 2020, with unemployment rate remaining at 7.5% through 2021

Leading indices

  • While they won’t dictate intraweek trends, we could see a blip or two during their releases
  • Conference Board’s leading index (May 19, 2:30 pm GMT) printed at -0.4% in February
  • Melbourne Institute’s leading index (May 20, 12:30 am GMT) worsened from -0.4% to -0.8% in March

Markit’s PMIs (May 20, 11:00 pm GMT)

  • Manufacturing PMI worsened from 49.7 to 44.1 in April
  • Services, which was hit “a lot harder” than manufacturing, plummeted from 38.5 to 19.6 in April

Overall risk sentiment

  • As a “high-yielding” bet, the Aussie can benefit from risk-friendly trading environment
  • PMI reports from other major economies (U.S., Euro Zone, U.K., Japan) are expected to mirror China’s “recovery” after easing lockdown measures
  • Updates on reopening of major economies can continue to provide support for risk-taking
  • Headlines on the escalating U.S.-China trade war can keep traders from buying AUD this week

Technical snapshot

  • RSI is flagging AUD’s “overbought” conditions against NZD on the daily time frame
AUD Forex Pairs RSI from MarketMilk
AUD Forex Pairs RSI from MarketMilk
  • AUD is on bullish trends against GBP, NZD, and CAD
  • Watch out for retracements or reversals on AUD/USD and AUD/JPY’s daily charts
  Chart of the Day XAUUSD
AUD Forex Pairs EMAs from MarketMilk
AUD Forex Pairs EMAs from MarketMilk
    • AUD was most volatile against JPY, USD, CHF, and EUR in the last seven days
AUD Forex Pairs Volatility from MarketMilk
AUD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read AUD’s price recap for May 11 – 15!

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