Australia

I suspect we’ve entered a phase where politically-driven sentiment carries more weight than domestic data for AUD/USD. And with the VIX rising alongside political uncertainty, volatility could favour bears over the coming months as we head towards the US elections.

Australian unemployment may have risen, but so did all other key metrics including job growth and the participation rate. And that has likely provided a floor for AUD/USD and AUD/JPY over the near term.

China's third plenum, New Zealand inflation and the Australian labour force report are potential drivers for AUD/USD this week.

Jerome Powell's testimony, RBA head of economics speech and US CPI all have the potential to drive AUD/USD next week. But looking at the strength of the Aussie's breakout, dips may look appealing to bulls.

Australia's uncomfortably high inflation report last week means there is a real risk the RBA could hike rates by 25 bp at their August meeting.

A relatively hawkish meeting from the RBA has supported AUD over the past 24 hours, sent AUD/JPY to an 11-year high and made next week's inflation report the more important.

Price action remains choppy and challenging for AUD/USD traders on the daily timeframe or higher. This makes it better suited for intraday traders, or those seeking to trade the range by entering around the lows, exiting near highs or potentially fade into the for a move lower. It is not a glamorous way of trading, but for now we have clear levels AUD/USD is holding around.

AUD/USD suffered its worst day in five weeks on Friday after a strong NFP report saw the USD wipe out a week's worth of losses in just two hours.

The Reserve Bank of Australia (RBA) kept Australia’s cash rate unchanged at 4.35% in May but refrained from increasing its longer-term underlying inflation forecasts, limiting the risk of a near-term interest rate hike.

Tuesday looms as a potential make-or-break session for Australia’s ASX 200 with futures sitting at a key technical level on the charts ahead of the RBA interest rate decision. One saving grace may be the continued rebound in iron ore futures in Singapore.

The RBA will announce their cash rate decision on Tuesday alongside their quarterly SOMP with updated staff forecasts. And that can quickly reshape expectations for the rest of the year and move AUD/USD accordingly.

AUD/USD notched up a 5-day rally against the US dollar despite the hotter PCE inflation report for the US on Friday. Yet resistance levels nearby suggest it may be due a pullback.

Whilst it appears that tensions in the Middle East have receded, headline risks remain a threat that traders need to keep in mind this week. And if sentiment is allowed to recover, economic data such as the key inflation reports for Australia and the US will be allowed to make their mark on AUD/USD.

AUD/USD traders will keep an eye on NZ inflation figures next week to see if disinflationary forces are picking up pace, in hopes that it will provide a lead for Australia. But if Thursday's AU employment report continues to knock out decent figures, then an RBA cut remains to be a distant hope for the future.

Due to the shorter trading week, we take a look at how AUD/USD has performed around Easter over the past 30 years.

Over the past few hours we have seen the Fed hint at multiple cuts this year, and Australian employment data outperform to send AUD/USD above 66c.

Friday looms as an important day on the directional risks for Australia’s ASX 200 with futures puncturing through uptrend support overnight dating back to when the Fed pivoted away from rate hikes in early November. Recent history suggests it may pay to wait to see whether the break sticks.