AUD open to extended downside as attentions turn to Non-Farm payroll numbers

AUD / USD

Expected Range: 0.7330 - 0.7590

The Australian dollar enjoyed a mixed trading session Wednesday as the fallout from the RBA’s rate cut continued. The AUD struggled to break above 0.75 and spent much of the day bouncing between intraday highs at 0.7517 and session lows at 0.7450. Tuesday’s RBA rate announcement leaves the AUD vulnerable to a deeper downward correction. Having broken important technical supports at 0.75 the Aussie is poised to make a meaningful push below its 50 day moving average. Such a break may force the AUD nearer major downside targets at 0.7330 and 0.72. Attentions now turn to domestic retails sales and trade balance numbers with investors seeking a strong macroeconomic print to underpin the currency and halt the decline. A poor print coupled by a strong U.S employment report Friday could provide the catalyst for a push through support at 0.7450. 

NZD / USD

Expected Range: 0.6810 - 0.7010

The New Zealand dollar suffered a second consecutive daily decline as softer employment data, falling oil prices and upbeat U.S macroeconomic data helped fuel a USD rebound. An unexpected uptick in the unemployment rate to 5.7% saw the NZD slip below 0.69 through domestic trade. Expanding U.S services coupled with a larger than expected U.S crude oil inventories print added additional downward pressure to the NZD and the Kiwi touched intraday lows at 0.6861. Attentions now turn to U.S unemployment claims ahead of Friday’s all important non-farm payroll report for direction into the weekly close. 

GBP / AUD

Expected Range: 1.9280 - 1.9680

The Great British Pound edged lower throughout trade on Wednesday as investors backed a short term USD rebound. A softer than anticipated construction PMI read pushed sterling lower while a stronger than anticipated U.S trade balance report coupled with an upbeat ISM non-manufacturing print helped bolster speculation the U.S economy may be on track to reverse the path  of sluggish growth suffered throughout the first quarter. Comments from FOMC non-voting members Williams and Lockhart helped underpin the USD recovery as both officials suggested a June rate hike was still on the cards. Attentions today turn to Services data with offshore direction coming from U.S unemployment claims. 

USD, EUR, JPY

The U.S Dollar clawed back some of the weeks early losses rebounding against both the Euro and Yen throughout trade on Wednesday. Having touched 10 and 18 months lows against it major counterparts the Greenback found support in stronger than anticipated Services data and Factory orders. ISM’s non-manufacturing report showed the services industry expanded at its quickest pace since December while trade balance numbers edged lower, sparking speculation the U.S economy may be on track to boost growth after a sluggish first quarter. The USD moved back through 107 touching intraday highs at 107.30 against the Yen while EUR USD slipped back below 1.15 to touch intraday lows at 1.1471. Capping the advance a softer than anticipated preliminary non-farm payroll report. ADP’s labour market print noted a downturn in new jobs, suggesting just 156,000 worker were added to the economy throughout April. The read falls well short of the 205,000 expected and is the smallest monthly advance in 3 years. The report does little to underpin investor hopes of a strong/upbeat non-farm payroll report due Friday where a poor read will likely shut the door on a June rate hike. Attentions today turn to U.S unemployment claims and FOMC member James Bullard for direction into the end of the week.