WEEKLY CURRENCY OUTLOOK

• We have minimal high-impact data this week for the AU & US markets.
• USD public holiday on Monday, so minimal volatility is expected for AUDUSD.
• Expecting the AUDUSD to range between 0.6770 and 0.6940 this week on technical analysis.

-USD is expected to range/consolidate after last week’s fall.

-FOMC Chair Powell is expected to remain quite hawkish in this speech despite a fall in CPI.

-USD to be mainly influenced by external/offshore factors rather than US data this week.

-There’s news of a potential large stimulus package in China that may support the AUD/USD pair which includes more infrastructure spending.

-If reports are true, then the AUD/USD pair can head towards 69c near resistance level of 0.6940.

-However, it is important to note that the stimulus news is already priced into the market, so only a significant/material surprise can shake the market.

-The RBA minutes are also expected to be released and outline concerns around high inflation and wages.

-Financial markets are still pricing in another two 25bps rate hikes, which could upset the market even further.