AUD Weekly Forecast (Nov. 18-22)

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A surprisingly weak labor market report sank the Aussie across the board last week. Can the RBA break the bears’ momentum?

Here are catalysts that could affect the Aussie’s price action:

RBA’s meeting minutes (Nov 19, 12:30 am GMT)

Reserve Bank of Australia (RBA) kept its cash rate at 0.75% and supported its confidence that the economy has reached “a gentle turning point” after hitting a soft patch in H2 2018
The decision, along with U.S.-China trade optimism, boosted AUD higher until the start of London trading
Watch for clues that the RBA will consider QE especially since Gov. Philip Lowe has a speech entitled “Unconventional Monetary Policy: Some Lessons from Overseas” scheduled next week

Manufacturing PMI inched lower from 50.3 to 50.1 in October, the lowest in three and a half years. New orders decreased for the first time ever thanks to weak demand
Markit’s services PMI also weakened from 52.4 to 50.8 for the month. New orders and employment weakened, while business confidence sank to a seven-month low
AUD dropped to new intraday lows at the release and barely recovered for the rest of the day
Watch out for even weaker readings that suggest that the economy is hurting from global trade pressures

Other major central banks like the ECB and Fed will publish their meeting minutes this week. Their immediate plans could give clues on the direction of global interest rates
Markets expect the PBoC to lower its new loan prime rate (LPR) on Wednesday after unexpectedly injecting liquidity last Friday
With less than a month to go before the December 15 tariffs kick in, all eyes will be on the Trump admin’s willingness to adjust its existing tariffs long enough to lock in a “phase one” deal with China. Markets are cautiously hopeful that a phone call between Liu He, Lighthizer, and Mnuchin over the weekend will lead to more substantial updates

Trading AUD against GBP, EUR, JPY, and NZD is a good idea if you’re looking for strong price movements

AUD Volatility Profile from MarketMilk™

AUD/JPY is trading above its 50 SMA but lower against its 200 SMA. AUD/CHF, AUD/CAD, and AUD/USD could also see short-term retracements on their longer-term downtrends