WEEKLY CURRENCY OUTLOOK

• We have a few key high-impact data events this week for the AU & US markets.
• Strong selling pressure indicating more risk to the downside but potential consolidation/range moves.
• Expecting the AUDUSD to range between 0.6600 and 0.6740 this week on technical analysis.

• AUDUSD will likely consolidate this week after last week’s significant drop (-2.9%).
• USD has some high-impact data this week, which may drive the currency pair and cause volatility.
• Russia’s political instability is also adding further support to the USD.
• With global interest rates continuing to rise, recurring themes of a recession are still in play, with the US & Canada looking seemingly close to Europe’s recessionary situation later this year.
• We expect another strong 0.4%/mth in US PCE inflation reading which highlights that market participants are under-pricing the risk of multiple increases in the Funds rate, which is a concern.
• AU CPI is one of the most closely watched economic indicators, as there is a direct correlation between high CPI and higher rates.
• AU CPI is expected to drop from 6.8% y/y to 6.2% y/y, which is meaningful but insufficient.

AUDUSD might receive a small bump upwards if the CPI is better than expected, and expect to see some volatility in the AUDUSD pair should these data releases not meet expectations.