**AUD/USD Weekly Forecast: Strong Dollar Puts Pressure, RBA in Focus**
*Adapted and expanded from an article by Yohay Elam, Forex Crunch*
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The AUD/USD pair concluded the previous week under notable downward pressure, as the US dollar maintained its strength and a series of economic events shaped market expectations. As traders look ahead, all eyes turn to the Reserve Bank of Australia (RBA) and forthcoming economic data, which are anticipated to drive volatility in the pair. This comprehensive forecast examines recent developments, provides an in-depth technical analysis, and analyzes upcoming events and their potential impact on the AUD/USD exchange rate.
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## Overview: Why Is the Australian Dollar Struggling?
Over the past week, the Australian dollar has seen significant declines against the US dollar. Several intertwined economic factors have contributed to this weakness:
– Resilient US economic data, reinforcing perceptions that the Federal Reserve will keep interest rates elevated for longer.
– A cautious market sentiment, prompting investors to seek the relative safety of the US dollar.
– Mixed signals from the Chinese economy, impacting Australian commodity exports, particularly iron ore.
– A dovish outlook from the Reserve Bank of Australia, contrasting with hawkish projections from the Fed.
These dynamics have weighed heavily on risk-linked currencies, such as the AUD, which historically is sensitive to shifts in global risk appetite and commodity prices.
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## Recap: Last Week’s Economic Highlights
### 1. US Data Consistently Exceeds Expectations
– US non-farm payroll figures were robust, indicating ongoing strength in the labor market.
– The latest CPI data showed inflation remains somewhat sticky, keeping pressure on the Federal Reserve to avoid rate cuts in the near term.
– Higher yields across treasuries made the US dollar more attractive to investors globally.
### 2. Uninspiring Australian Indicators
– The Westpac Consumer Confidence Index continued to linger near historical lows, reflecting ongoing household pessimism.
– Australian employment data signaled only modest improvements, with the participation rate remaining stable but wage growth failing to impress.
– RBA meeting minutes offered little optimism, suggesting the central bank prefers a wait-and-see approach rather than actively hiking rates.
### 3. China Remains a Wildcard
– As Australia’s top trading partner, China’s economic performance is critical. Recent Chinese trade and manufacturing data were mixed, dampening demand prospects for Australian exports.
– Ongoing geopolitical risks, particularly concerning US-China relations, have made commodity-linked currencies more volatile.
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## Technical Analysis: Chart Patterns and Key Levels
### AUD/USD Weekly Chart Summary
Over the past months, the AUD/USD pair has exhibited a gradual downtrend, with recent price action showing accelerated declines. Key technical levels are highlighted below:
– **Support Levels**:
– 0.6500: Psychological level and previous multi-month support.
– 0.6450: March swing low, frequently tested as a demand zone.
– 0.6390: Year-to
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