AUD/USD: Bulls target 200-day EMA while waiting for fresh clues around 12-week top
|- Aussie bulls cheered domestic employment data, dovish Fedspeak to lead the G10 currencies.
- US-China trade developments, market risk sentiment will be closely followed amid a dearth of major data/events.
While Wednesday’s jobs report initially built the Aussie run-up, dovish comments from the key Federal Reserve policymakers fuelled the quote towards 12-week high as it trades near 0.7075 on early Friday morning in Asia.
No change in the Unemployment Rate and an upbeat reading of the Fulltime Employment data tamed expectations of successive rate cuts by the Reserve Bank of Australia (RBA) and pleased the Australian Dollar (AUD) buyers the previous day.
Adding to the sentiment, with a great force, were the US Federal Reserve policymakers that highlighted prospects of 50 basis points Fed rate cut with their statements favoring the need for "swift" and "preemptive" action.
However, the presence of risk aversion and doubts over the US-China trade deal remain present with the US 10-year treasury yield revisiting early-month levels around 2.02% by the press time.
Investors may now concentrate more on the qualitative catalysts amid lack of data on the economic calendar. Among them, signals for the Fed’s future monetary policy and the trade-related headlines might lure the short-term traders.
Technical Analysis
200-day exponential moving average (EMA) level of 0.7100 becomes the landmark to achieve for the Aussie bulls at the moment. However, a sustained break beyond yesterday’s high around 0.7080 becomes a precondition which if not matched shifts sellers’ attention to overbought conditions of 14-day relative strength index (RSI) and can recall 0.7050/45 back to the chart.
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