The AUD/USD pair continued to plunge last week which suggests that consolidation pattern from 0.7625 has completed at 0.8161 already. Initial bias remains on the downside this week for 0.7532 support first. Break will extend the larger down trend to 61.8% projection of 0.8910 to 0.7625 from 0.8161 at 0.7367 next. On the upside, above 0.7839 minor resistance will dampen the bearish case and turn bias neutral first. In such case, the side-way consolidation from 0.7625 might extend with another rise.
The Australian dollar declined against its U.S. counterpart on last weeks trading session to end close to a seven-week low amid growing prospects the Federal Reserve was on track to raise interest rates later this year. For the week, the pair lost 2.41%, the second straight weekly decline, amid growing expectations that the Federal Reserve would raise interest rates after the summer.
Economic data released in the past week, including reports on inflation, new home sales, business investment and consumer confidence all indicated that the economy is gaining momentum after a slowdown in the first quarter, supporting the case for higher interest rates later this year.
In the week ahead, investors will be focusing on Friday’s Non-farm payrolls report for May, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.
Market players will also be focusing on the outcome of a policy meeting of the Reserve Bank of Australia on Tuesday.