During the last trading week, the AUD/USD currency pair ended with an increase of 1.06%. Market participants focused on the situation with the spread of COVID-19, the Trump administration's attempts to negotiate with the Democrats on the adoption of a new package of stimulus measures to support and restore the world's leading economy, and macroeconomic statistics. It is worth noting that the minutes of the last meeting of the Federal Open Market Committee (FOMC) of the Federal Reserve System did not cause a strong reaction from investors and did not have a significant impact on the results of weekly trading. The reason for this is the lack of any new significant information about the subsequent monetary policy of the Federal Reserve. Everything has been clear there for a long time. The current low rates will remain so for a long period of time and the US central bank's new and more flexible approach to inflation and unemployment has already been won back by the market.
As for the Reserve Bank of Australia (RBA), it seems that they are still satisfied with the current monetary policy and are not eager to change anything radically. However, experts from some major commercial banks believe that the RBA may lower the key interest rate to 0.10% by the end of this year, as well as increase the program of incentives to support the national economy. Another important factor that should not be forgotten is China. China is the largest trading partner of Australia, particularly in terms of exporting raw materials, so the Australian Dollar exchange rate to some extent depends on the exchange rate of the Chinese Yuan against the US Dollar.
Before proceeding to the price charts, I will outline the main macroeconomic events that may affect the price dynamics of the AUD/USD currency pair. The main events from Australia this week will be the data on the labor market, as well as the speech of the head of the RBA Philip Lowe. From the United States, special attention should be paid to the Consumer Price Index, which, in the light of the Federal Reserve's new approach to inflation indicators, will be of interest to market participants.
Weekly
As a result of strengthening in the last five-day trading week, the AUD/USD pair overcame the red line of the Tenkan Line of the Ichimoku indicator, as well as the orange 200 exponential moving average, which converged near 0.7212. The closing of trading above these indicators, as well as the significant 0.7200 mark, leaves good chances for the subsequent growth of the instrument. I would also note that after an unsuccessful attempt to break through another strong level of 0.7400 and the appearance of several Doji candles, it was time to count on a reversal of the course in a bearish pull. This attempt was made two weeks earlier, but the decline was stopped by a strong and significant psychological level of 0.7000 from which the upward dynamics of the instrument gained a second wind. Now we can expect another approach to the area of 0.7400 and another attempt by the bulls on the Australian Dollar to go up this important mark. If the rate increase manages to solve this problem, their next goal will be the psychological level of 0.7500-- the breakdown of which will open the way to even higher prices. The bearish scenario for the pair will become relevant in the case of a true breakout of 0.7000, as well as a black 89 exponential moving average.
Daily
On this timeframe, the pair passed the Kijun line and 50 simple moving average on October 5-9. The quote is gradually approaching the upper limit of the daily Ichimoku cloud; the breakdown of which and the exit from it up will certainly strengthen the bullish mood for AUD/USD pair.
Given the technical picture of both time periods considered, I am more inclined to the subsequent growth of the quote. To open long positions on the Australian Dollar, it is better to wait for the pair to exit the cloud and plan purchases on the pullback to its broken upper border. If you plan to buy at lower prices, you should wait for a pullback to the 0.7215-0.7200 price zone and then buy the pair with the goals of 0.7330, 0.7370 and 0.7400.