Weekly Forex Preview: 17 – 21 May 2021 / AUDUSD Outlook on the Edge

Posted by Lulama Msungwa -
Scope Markets

Key points

  • The markets will be fairly busy in the week ahead
  • The FOMC will be in focus, and the Sterling pounds will be eyeing CPI amongst other news events
  • The U.S stock market will still access the inflation debate
  • AUDUSD outlook


The markets will be fairly quiet to start the week as China retail sales data and Japan GDP figures start the week.

The China retail sales data will be the focus on Monday, and we expect the data to show further rebound as the country focus on recovery.

The focus will shift to Japan’s GDP figures later on the day. The Yen is not going to be influenced as it does not react to the economy anymore but rather to global bond yields. We can expect the data to show slight improvement.


The markets will be busy as the focus shift to Central Bank, employment data, and GDP figures are expected to influence the market movement.

The RBA meeting minutes will draw the market attention, although the Aussie Dollar is focused on the labor market figures, which could spike the market movement. Investors will be eyeing for details on bond tapering before the employment report. The AUDUSD outlook could use some improvement.

It’s a very busy week ahead for the Sterling Pound and the U.K markets. The focus on Tuesday will be on the labor market data. The employment report will be the key news for the Sterling pound. The labor market was hit the hardest in the U.K, with the Furlough Scheme having had supported the most hit sectors, whereas in other sectors hiring has improved. We expect the data to show improvement in April, and a better-than-expected report could be positive for the Pound.

The Eurozone GDP will be the focus for the Euro markets and could influence the movement of the market. We expect to see a rebound in the GDP due to reopen of the economy and vaccination progress allowing economic activities to take place across most parts of Europe.


The markets will be busy as U.K inflation takes the center stage in the markets after the U.S CPI shocking data exceeded expectations.

The U.K consumer price index will be the focus for the sterling pounds and London markets. The data is set to be compared to the April lows of the pandemic. The vaccine rollout and reopening of the economy have been supporting the bullish movement. The CPI figures are expected to exceed 2% by the end of the year unless we surprise like in the U.S.

The Bank of Canada consumer price index will focus on the commodity-linked Canadian Dollar as the markets. The Loonie has been outstanding in the last few days, supported by the reopening of the economy, the oil prices increasing, and the U.S stimulus rollout. The economy has been encouraging, and we could expect the CPI to exceed expectations to signal economic recovery and recovery of commodity markets.

The market focus will shift later on the day to the U.S FOMC meeting minutes of the last Fed meeting. After the shocking inflation data, investors will be hoping that the Fed to reaffirm that inflation is “transitory”, but the price pressure is increasingly difficult to dismiss completely. Any changes to the inflation details could influence the U.S market movement.


The Australian jobs report will be the key start focus in the markets and especially for the Aussie Dollar, which looks to bounce back from Dollar losses. We expect unemployment to decline and give a clear detail on the recovery progress of Australia. A better-than-expected reading will push the AUDUSD outlook to 0.78900.


The Australian markets will close its busy week with the retail sales data and further influence the Aussie. The reopening of the economy and more jobs being added could have fueled the retail figures in April. We expect the detail to exceed expectations.

The preliminary PMI data for the Eurozone will be the central focus in the Euro markets. The Eurozone was hit the hardest by the pandemic after many countries reintroduced lockdowns. However, the vaccination process and the reopening of the economy across different countries could provide positive PMI data and show that the European zone is showing signs of recovery.

The U.K will set the tone for the Sterling Pound movement. The reading data is expected to show a rebound in the retail data fueled by the reopening of the economy in April. And the broader economic outlook fueled by the rising consumer confidence and vaccination program giving a clear optimism for economic recovery. This is going to be the main message for the PMI data.

Canada retail sales data will finish off the week.

Technical outlook

AUDUSD outlook

The Aussie Dollar has sold drastically in previous sessions after the U.S Dollar found support from the CPI data. AUDUSD outlook shows the AUD has found its support at 0.76937 as it looks to bounce back from the recent losses, and the market could be looking to set for gains.

AUDUSD daily timeframe

Technically, the market could be looking to go to the top towards the resistance level ahead of key economic data, and a break above the resistance could signal further gains and a move above the bullish pennant level. The bears will be eyeing that the markets reject in the trendline for downside movement.

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