AUD/USD forecast: signal for the week of 5th – 9th June

on Jun 3, 2023
  • The AUD/USD pair retreated slightly after the latest US NFP data.
  • The Reserve Bank of Australia (RBA) will publish its decision on Tuesday.
  • Australia will publish its GDP data on Wednesday.

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The AUD/USD exchange rate drifted downwards slightly after the strong American non-farm payroll (NFP) numbers. After peaking at 0.6641 this week, the pair retreated to a low of 0.6600. It also dropped after Joe Biden signed the debt ceiling bill that was passed by Congress during the week.

RBA interest rate decision

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The most important AUD news of the coming week will be the interest rate decision by the Reserve Bank of Australia (RBA). This will be an important meeting since it comes after the bank delivered a surprise increase in its meeting in May.

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Economists believe that the RBA will decide to leave interest rates. Some, however, believe that the bank will deliver the second straight 0.25% increase since inflation remains stubbornly high. 

The RBA governor has insisted that the labor market remains significantly tight, which will make the fight against inflation a bit tough. The most recent data shows that Australia’s wage growth came in at 3.7% in April.

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The AUD/USD will also react to last Friday’s NFP data from the US. According to the Bureau of Labor Statistics (BLS), the economy added more than 339k jobs in May, signaling that the labor market is still tight. Wage growth continued rising during the month. The only blemish in the report was the unemployment rate, which rose to 3.7%.

These numbers mean that some hawks in the Fed could decide to hike interest rates by 0.25% since inflation remains stubbornly high. The most recent personal consumer expenditure (PCE) jumped by 4.7% in April.

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Looking at the economic calendar, there will be several important forex news to watch. On Wednesday, Australia will publish the latest GDP numbers while China will publish export and import numbers. Australia will publish the latest trade numbers on Thursday. There will be no major data from the US.

AUD/USD technical analysis

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The AUD/USD pair has been in a bullish trend in the past few days. It has managed to rise from a low of 0.6460 last week to over 0.6600. On the 4H chart, the pair has managed to cross the 50-period moving average and the 38.2% retracement level. The Relative Strength Index and the MACD have continued rising.

Therefore, the outlook for the week is bullish, with the key level to watch being at 0.6700. A drop below the key support at 0.6560 will signal that there are more sellers in the market.

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