AUDUSD on Friday rose 0.25% to 0.62161. Week ending 2025-01-03 moved lower by -0.14%. What happened.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.25%	15.3 Pips
Week 2025-01-03	-0.14%	-9 Pips
January	-0.06%	-3.9 Pips

Upcoming key events for the new week (London Time)

Wed 12:30 AM Monthly CPI Indicator (12-mth)
Wed 07:00 PM FOMC Meeting Minutes
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, recent economic data presents a mixed bag. The report from the Department of Labor highlights a decline in Initial Unemployment Insurance Claims for the week ending 28 December, dropping to 211,000 from a revised figure of 220,000. This decrease indicates a potentially strengthening job market or seasonal adjustments typical of the year-end period. Conversely, the Federal Housing Finance Agency reported a decrease in the U.S. House Price Index for October from 0.7% in September to 0.4%. This decline in the housing sector could reflect cooling home prices or potential affordability concerns among consumers.

The Australian Dollar ended December on a lower note, marking a significant downturn in its value against the U.S. Dollar. AUDUSD fell by 4.96% in December and has been on a declining trend for three consecutive months, positioning itself at the lowest since mid-October 2022. For the entire year of 2024, the Australian Dollar depreciated by 9.12% against the U.S. Dollar. The upcoming high-impact events, which include Australia’s CPI Indicator and the U.S. FOMC Meeting Minutes and Nonfarm Payroll Employment, are likely to significantly influence the currency pair’s movement.

The recent U.S. economic data could affect the AUDUSD exchange rate through different channels. The drop in U.S. unemployment claims supports a robust job market, potentially bolstering the U.S. Dollar as it suggests economic resilience and possibly more aggressive monetary policy from the Federal Reserve. However, an easing in house price increases might suggest some cooling off in the housing market, trotting a counterbalance effect by softening the U.S. Dollar’s strength somewhat. In light of Australia’s recent under performance and upcoming economic releases, volatility could increase if the U.S. data points to continued economic strength or if Australia’s CPI surprises the market. Traders will be watching the FOMC Meeting Minutes and Nonfarm Payrolls closely, as they will provide further insights into the Federal Reserve’s views on inflation and interest rates, potentially exerting downward pressure on the Australian Dollar should the policy forecast remain hawkish.

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 0.25% to 0.62. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2025-01-03, the pair dropped -0.14% or -9 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 is mixed. To see upside interest, we prefer to look at price breakout of week high of 0.62 or at least consolidates above Weekly Pivot level of 0.62. On the downside, we are looking at week low 0.62 or 0.62 (WS1) as immediate support level. AUDUSD need to break on either side to indicate a short-term bias. A close below week low of 0.62 would indicate selling pressure.

For the month of January, AUDUSD is down by -0.06% or -3.9 pips lower.

Weekly key levels to watch out:

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Construction Spending Source: Census Bureau