WEEKLY CURRENCY OUTLOOK

Summary
• Heavyweight data this week, with NFP & CPI expected to cause volatility in the AU/US markets.
• Aussie entered into a consolidation phase, so we could see choppy price action this week with spikes.
• Expecting the AUDUSD to range between 0.6360 and 0.6470 this week on technical analysis.

• USD was volatile during the FOMC speech at the Jackson Hole Symposium on Friday, Mr Powell didn’t mention anything new but noted: “we are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
• We have a huge week for AU/US markets in terms of high-impact data.
• NFP, AU CPI, and PCE Deflator are all likely to be market-moving during their respective times and likely to support the narrative of a “soft landing” in the US (i.e. avoiding recession).
• AU CPI will be closely monitored in AU, with most economists expecting the headline rate to drop 0.2% from 5.4% to 5.2%, which is a positive, but nowhere near enough to start cutting rates.
• Any data beating expectations can cause serious volatility in the markets, i.e., if CPI is much lower than expected, the AUD/USD can fall further.
• AUDUSD has found key support around 0.64, and in a consolidation phase, if it breaks below this, we could see 0.61 as the next major support.

Source: forexfactory.com