Against the backdrop of the weakening USD, an uptrend was formed four months ago, but today the Australian dollar is again under pressure, influenced by weak macroeconomic reports and expectations of an increase in the interest rate in the US. As a result, we have witnessed another price correction, which may be fatal for the AUD, given the lack of stimulus factors.
There aren't too many risk factors on the market, and there may be none of them at all for Aussie, as reports this week showed rising unemployment, poor consumer sentiment and economic activity, signaling a weak economy at a time when inflation remains high. Therefore, the RBA will face a choice to increase pressure on the economy by raising the rate or not to act, allowing inflation to develop further.
The US economy is in a better position, although inflation is also higher than expected. On the other hand, the situation on the labor market is better, and retail sales in January turned out to be almost 2 times higher than expected. Investors are certainly interested in the growth of the Fed rate, and they can count on it in the near future. The closer the Fed meeting, the more attention to the USD.
Next week will be with below average volatility. The most important macroeconomic reports have already been published, while new ones are not ready. Meetings of central banks are also not expected. Most tools for technical analysis show us a strong sell signal. We expect short deals to be most effective. In terms of technical analysis, the price correction is in the middle of the road. The MACD, Stochastics are down and the oversold zone has not been reached, so there is good potential for new Sales.
