• Australia’s inflation eased from 2.7% to 2.1% annually.

• The US economy added 12,000 jobs, well below the forecast of 106,000.

• Traders will watch the RBA and Fed policy meetings.

The AUD/USD weekly forecast indicates uncertainty ahead of a busy week with the US presidential election and RBA rate decision.

Ups and downs of AUD/USD

The Aussie had a bearish week amid economic reports from Australia and the US. The first report from Australia revealed that inflation eased from 2.7% to 2.1% annually, weighing on the Australian dollar. However, underlying inflation remained a concern that kept rate cut expectations low.

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Meanwhile, US data showed weaker-than-expected economic growth in the third quarter. Inflation accelerated by 0.3% in September, keeping Fed rate cut expectations unchanged.

The last report for the week revealed weaker-than-expected job growth. The economy added 12,000 jobs, well below the forecast of 106,000. However, the dollar soon recovered with uncertainty ahead of the US presidential election.

Next week’s key events for AUD/USD

Next week, traders will watch the Reserve Bank of Australia and Federal Reserve policy meetings. Economists believe the RBA will keep rates unchanged since inflation worries remain. At the same time, they don’t expect any rate cuts in Australia this year.

Meanwhile, the US central bank is set to cut interest rates by 25-bps. The latest employment figures solidified bets for a rate cut this November. However, markets are still absorbing the new outlook for gradual rate cuts. There is a chance that policymakers will sound hawkish. The US economy has shown unexpected resilience, pushing some to forecast only one cut this year. A hawkish tone might boost the dollar.

AUD/USD weekly technical forecast: Prone to test 0.6501 support

On the technical side, the AUD/USD price is approaching the 0.6501 support level. The bearish bias is strong because the price trades far below the 22-SMA, and the RSI is near the oversold region.

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Bears have maintained a steep decline since the price fell below the SMA. As a result, the price has failed to make any significant retracements to the SMA line. However, the steep decline cannot continue without a pullback.

If the price reaches the 0.6501 support next week, it might pause, allowing bulls to revisit the SMA resistance. If the SMA holds firm, the price will likely break below 0.6501 to retest the 0.6401 support level. On the other hand, a break above the SMA would signal a shift in sentiment to bullish.

https://www.forexcrunch.com/blog/2024/11/03/aud-usd-weekly-forecast-uncertainty-ahead-of-election-week/