On this last day of weekly trading, we will consider an interesting and much preferred currency pair—AUD/USD. Tonight at 00:30 UTC, the Reserve Bank of Australia (RBA) monetary policy report was published. Let me highlight the most important of these materials. According to the RBA, in the current and next years, the Australian economy will show growth of 3.5%. In this scenario, the unemployment rate will fall to 5.25% by 2023, and the inflation growth will be 1.75%. However, as noted in the bank, much will depend on vaccination against COVID-19. If this process proceeds favorably and the country's population develops a collective immunity to coronavirus infection, then by the end of 2022, unemployment may fall to the level of 4.75%. As for the inflation outlook, growth will be slightly faster, but inflation will still not reach the RBA's 2% target. Also, recall that at its last meeting, the Australian Central Bank decided to keep the key interest rate at a record low of 0.10%, but at the same time expanded the asset purchase program by another hundred billion Australian dollars. Now, let's take a look at the AUD/USD price charts, and for the sake of completeness, as well as understanding everything that is happening, let's turn our attention to the weekly timeframe.
Weekly
The current weekly candlestick actually has no body at the moment, indicating a fierce struggle between the opposing sides. Despite the strengthening of the US dollar in a wide range of currencies, the Australian dollar was supported by the RBA's decision to further increase the program of assistance to the country's economy, as noted above. It is reasonable to assume that the results of this week will depend on the data on the US labor market, which will be published today, at 13:30 UTC. If we note the purely technical nuances, the key point will be the closing of the current weekly trading relative to the red line of the Tenkan Ichimoku indicator. It is also necessary to consider the closing price of the previous candle 0.7643. If the traders on the rise of the Aussie exchange rate manage to finish the five-day trading period above this mark, it will be possible to re-test the strong resistance zone of the sellers 0.7765-0.7820.
If the week ends with the formation of a bearish body at the candle and the closing price below the Tenkan line, it is quite possible to expect testing for a breakdown of the key psychological level of 0.7500, overcoming which will send the pair to the support area of 0.7460, and below, to the blue Kijun line, which passes at 0.7406.
Daily
The situation on the daily chart is more or less clear. After the appearance of the candle with long shadows for February 2, the pair is still trading in the range of 0.7662-0.7563. It is typical that the upper limit of this range is strengthened by the red Tenkan line, so sales after rising to the 0.7660 area look like a rather attractive trading idea. Furthermore, the US dollar has recently shown a tendency to strengthen. For now, we will stop at this, and also wait for the releases on the US labor market. In my opinion, the situation will be clearer after the closing of the current five-day trading period.
Have a nice weekend!