• The US CPI number came in higher than expected, showing increased price pressure.

• Wholesale inflation missed forecasts, weakening the dollar.

• The US will release retail sales figures showing consumer spending.

The AUD/USD weekly forecast shows a bearish tilt amid strong dollar as US data diminishes hopes for a Fed’s rate cut in November.

Ups and downs of AUD/USD

The Aussie had a bearish week with no major economic reports from Australia. Meanwhile, the US released several key reports that increased the likelihood of a pause during the November Fed meeting.

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The US CPI number came in higher than expected, showing increased price pressure. Although it eased rate cut bets, policymakers are convinced inflation will reach the 2% target. Meanwhile, wholesale inflation missed forecasts, weakening the dollar.

Another report showed a higher-than-expected number of jobless claims, indicating weakness in the labor market. Market participants also reviewed the FOMC meeting minutes, which showed a strong dovish stance before September’s robust employment figures.

Next week’s key events for AUD/USD

Next week, Australia will release employment figures that might impact the RBA’s policy outlook. Australia’s labor market has shown resilience in the past, leading to a hawkish tone from RBA policymakers. In the last report, there were 47,500 jobs, with the unemployment rate at 4.2%.

This month’s report might show continued resilience or signs of a cooling labor market. A robust report would boost the Aussie by pushing back the timing for the first rate cut. On the other hand, if there are signs of weakness, market participants will increase bets for a cut in December.

Meanwhile, the US will release retail sales figures showing consumer spending. A jump in sales will indicate robust consumer spending, reducing bets on a November Fed rate cut. The opposite is also true.

AUD/USD weekly technical forecast: Bears breach channel boundaries

On the technical side, the AUD/USD price has broken out of its bullish trendline in a sharp bearish move. Bulls gave up control when the price got to the 0.6901 resistance level. They confirmed this shift in control when the price broke below the 22-SMA and the channel support line.

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However, the price is currently facing the 0.6700 support level. Therefore, it might bounce higher to retest the recently broken channel line before either climbing or bouncing lower to break below 0.6700. A break below this level would clear the path to the next significant support at 0.6501.

https://www.forexcrunch.com/blog/2024/10/12/aud-usd-weekly-forecast-us-data-dims-feds-move-in-nov/