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Weekly Outlook | Iran Peace Deal in the Making?
Updated Updated Tue, 2026 May 5 01:34
Equity markets closed higher last week and with that the positive sentiment might indeed continue to improve. The weakness of the Dollar also helped to support the demand for stocks. The USDX (Dollar index) lost sharp momentum, which might be due to continue. This week’s data, on the other hand, might also offer more clarity.
Traders will focus on the important news releases, which will be released from the RBA in Australia as well as the US. The AUD can be used as guidance for potential moves in the equity market and overall risk sentiment. A stronger Australian Dollar tells traders that stocks might continue to move higher. In contrast also the Nonfarm Payrolls report offers insights into the US economy. Better employment data can be used as guidance for the US economy and hence the potential of the US- Dollar as well as US equities.
Important events this week:
– AU – rate decision– it is expected that the Royal Bank of Australia will increase its interest rate again. After the two recent rate hikes from February and March this year the Bank is expected to hike the rate to 4.35%. Inflation data is suggesting that the price pressure keeps increasing as the recent set of data showed last week. Despite lagging behind expectation, the positive trend seems clear. A strong reason for the RBA to increase the interest rate moving forward.
AUDUSD weekly chart
At the end of February, the AUDUSD currency pair was not able to break above the technical resistance zone of 0.7120. Mid of April this year the market broke above that level but then came back down again. After such breakout, the price often comes back to test a breakout zone, which had been the case two weeks ago. Since the market has now been able to push higher the upside momentum might be due to continue. Despite the fact that the rate hike of the RBA is being expected it might still lead to a continuation of the positive market momentum. The rate decision will be released on Tuesday, 5th of May 2026.
– US- NFP report– it is expected that only 60,000 jobs have been added to the US economy during the last period. The report continues to lag behind data from several months ago, when more than 100.000 jobs had been on a payroll on a constant basis. A potential sign that the US economy does not increase.
USDX weekly chart
The Dollar index remains volatile and should be also taken into consideration here. The index offers a basket of currencies measured against the Greenback. Currently, the index, which is also referred to as the DXY, keeps weakening. The US- Dollar is hence losing momentum. A break away of the important 50- moving average zone might be on the cards anytime soon. Should the market continue to fall further, a break below the 97.50 level might occur. A weaker NFP report might support such view. On the other hand, a push above the level of 99.00 means that the Dollar will strength. As a result, stocks might weaken and the positive risk sentiment might fade again. The NFP report will be released on Friday, the 08th of May at 14:30 CET.