AUD/USD Weekly Forecast: Risk-on Support the Aussie, US Employment May Change the Picture

Record highs in Wall Street amid an upbeat mood underpinned the AUD.

Softer than anticipated Australian macroeconomic figures capped the upside.

AUD/USD modest recovery is not enough to grant further gains ahead.

The AUD/USD pair trades a handful of pips above the 0.7600 level, up for the week after falling to a fresh 2021 low of 0.7476 in the previous one. The pair gained ground on the heels of a generalized positive markets mood.

Generally speaking, macroeconomic data coming from major economies indicated sustained growth, regardless if it missed or surpassed the markets expectations. Central bankers from around the developed world are showing different degrees of optimism regarding the post-pandemic comeback, which is underway.

Markets Rotate Around US Monetary Policy

US Federal Reserve Chair Jerome Powell testified before Congress on Tuesday but had no impact on price action, as he pretty much reiterated what he declared with the FOMC statement.

News that US Congress has agreed on a spending deal further fueled the upbeat sentiment. US President Joe Biden announced on Thursday that a bipartisan deal was reached on Bidens infrastructure plan. The announcement lacked details but was enough to boost equities, with Wall Street ending the week near all-time highs.

Australian data was softer than anticipated, preventing the aussie from posting substantial gains. The preliminary estimate of May Retail Sales printed at 0.1%, down from 1.1% final in April. The June flash Commonwealth Bank PMIs held within expansion territory but contracted from a month earlier.

In the US, macroeconomic figures also missed expectations but were far from concerning. Durable Goods Orders were up 2.3% in May, while the preliminary Markit PMIs resulted above 60 in June, according to preliminary estimates. Initial Jobless Claims for the week ended June 18, printed at 411K. Finally, the Core Personal Consumption Expenditures Price Index jumped to 3.4% YoY as expected in May.

AUD/USD Technical Outlook

The AUD/USD pair has recovered half the ground lost in the previous week, although further gains are still unclear. In the weekly chart, the pair is developing below a flat 20 SMA, which stands at around 0.7710, while the longer moving averages also lack directional strength but far below the current level. Technical indicators have turned modestly higher but remain within negative levels.

On a daily basis, the pair has managed to recover above a flat 200 SMA but remains below the shorter ones, and with the 20 SMA maintaining its bearish slope. Technical indicators corrected oversold conditions from the previous week´s sell-off but remain within negative levels, without strength enough to support continued recovery.

From the current level, supports come in at 0.7530 and 0.7460, followed by the 0.7390 price zone. The immediate resistance level is 0.7620, with a break above it favoring an extension towards the 0.7700 region.