The USD weakened across all major Forex pairs in the week's last trading session. As market participants digest Fed Chair Powell's hawkish comments (suggesting a bigger interest rate hike at the next FOMC Policy Meeting), many traders have started closing their trading positions to consolidate profits, causing the USD to fall to a more than-a-week low against the AUD.
The next Inflation Rate report on September 13th will have a high impact on the Fed's Interest rate decision; if inflation does not give in, we could see a larger hike, potentially at 100 basis points. On the other hand, if the inflation rate report shows a rate equal to or lower than 8.1%, the hike is expected to be between 50 and 75 bsp.
Australia will release high-impact economic indicators next week. On Monday, the Westpac Consumer Confidence Index is expected to come out at 80.5, a figure lower than the previous month. A higher figure than 80.5 will likely strengthen the AUD, while a lower number will weaken the Aussie against other currencies.
On Wednesday, AU will release the unemployment rate, a very solid economic indicator that gauges the strength of a country's labor market. The figure is expected to stay unchanged from the previous month at 3.4%, a good figure that shows a healthy economy in Australia.
The general trend continues to be downwards as the price is below the short and long-term moving average; the trend lines crossed just four sessions ago; however, after today's rally, there is a chance of a trend reversal if the price breaks the 50% Fibonacci retracement at $0.69091.
The Bollinger bands are closing up, but they are still wide enough to expect high volatility in the upcoming trading sessions. The pair could enter a consolidation phase as the bands shrink.
The relative strength index climbed from 37% to 48% in today's session, allowing the pair to move in either direction as the RSI is very neutral. Our parabolic SAR indicator suggests that the price will continue to move upwards.
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