AUDUSD on Friday rose 0.3% to 0.62524. Week ending 2024-12-20 moved lower by -1.8%. What you need to know.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.3%	18.4 Pips
Week 2024-12-20	-1.8%	-114.7 Pips
December	-3.92%	-255 Pips

Upcoming key events for the new week (London Time)

Tue 02:00 PM Christmas Day
Wed 05:00 AM Christmas Day
Wed 02:00 PM Boxing Day

What happened over the week

The U.S. economy saw a mixed set of economic results recently. According to the Bureau of Economic Analysis, the U.S. Personal Income for November decreased to 0.3% from a revised 0.7% in October, while Consumer Spending (PCE) saw an increase. The PCE Price Index for November over a 12-month period rose slightly to 2.4%. The Manufacturing Business Outlook Survey decreased significantly to -16.4 points in December, reflecting reduced optimism. The GDP annual rate improved to 3.1% in the third quarter from 2.8% in Q2, with the GDP Price Index remaining unchanged at 1.9%. Notably, the Federal Reserve reduced the Interest Rate for the federal funds to 4.5% from 4.75%, indicating caution against potential rate cuts in the near future.

Other indicators, such as Initial Unemployment Insurance Claims, showed improvement, decreasing to 220,000. The housing market presents a mixed signal, with housing starts dropping to 1.289 million, while building permits increased to 1.505 million in November. The Monthly Retail Trade saw a modest growth of 0.7% in November, potentially reflecting continued consumer resilience despite some headwinds.

These data points impact the AUDUSD currency pair dynamics. With the U.S. central bank’s cautious stance on interest rate movements and mixed economic indicators, there’s an ongoing anticipation about future monetary policies. This can influence the U.S. dollar’s strength, especially as reduced interest rates often lead to a weaker currency. As a commodity-linked currency, the Australian dollar may gain relative strength if the U.S. dollar shows weakness, yet challenges in global economic activity or investor risk aversion could cap its gains. However, on broader time frames, speculative positioning or differing trajectories of the U.S. and Australian economies post-2024 could contribute to further volatility in the AUDUSD pair.

From X (Twitter)

🇦🇺 In December, the Australia Survey of Consumer Inflationary Expectations increased to 4.2%, up from 3.8% in November.https://t.co/FLvlbmUdeF https://t.co/KBaKsnUF16

— Market Recap (@forexforum) December 22, 2024

What can we expect from AUDUSD for the new week and what happened on Friday?

AUDUSD on Friday rose 0.3% to 0.63. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-12-20, the pair dropped -1.8% or -114.7 pips lower.

Looking ahead, AUDUSD looks mixed as the pair is likely to consolidate above week low of 0.62.

For the new week, our technical outlook looks bearish, immediate support level is at 0.62 (WS1) with break below could see further selling pressure towards 0.61 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 0.64 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 0.62 would indicate selling pressure.

For the month of December, AUDUSD is down by -3.92% or -255 pips lower.

Weekly key levels to watch out:

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