AUD/USD enters NFP day above 0.6900, bulls keep January top on the radar
|- AUD/USD marks another pullback from the below-0.7000 area with a recent high be 0.6988.
- Market’s risk-tone sentiment stays positive but optimism seems to fade off-late amid fresh US-China tussle.
- A light calendar, pre-NFP trading lull could restrict the market’s moves.
- Qualitative catalysts might offer an intermediate direction in Asia.
AUD/USD eases from 0.6953 to 0.6940 amid the initial few minutes of Friday’s Asian session. Even so, the Aussie pair keeps trading in the range between 0.6928 and 0.6958 following another U-turn from above 0.6980 mark, still under 0.7000 threshold.
Optimism pauses ahead of the key NFP, thanks to US-China tension…
With the recent comments from the US Secretary of State Mike Pompeo unearthing the US-China tussle, the market’s earlier risk-on sentiment seems to have taken a halt. The Trump administration member praised Nasdaq’s move on listing rules for Chinese companies.
Before that, US President Donald Trump reiterated its criticism of the Asian major. The Republican leader said "The United States wants an open and constructive relationship with China but achieving that relationship requires us to vigorously defend our national interests. The Chinese government has continually violated its promises to the US and many other nations."
Even so, US Trade Representative Robert Lighthizer said he feels “very good” about phase one trade deal with China.
Against this backdrop, Wall Street marked mildly negative closing whereas the US 10-year Treasury yields gained over six basis points (bps) to cross 0.80% mark to 0.825% by the end of Thursday’s US session.
While Australia’s May month AiG Performance of Services Index and HIA New Home Sales for April can offer intermediate moves, markets are likely to remain mostly inactive during the pre-NFP cautious hours of trading. The Aussie AiG figures flashed 27.1 mark in April whereas the housing market index slumped -21.1% in March.
Concerning the US Employment data for May, Westpac said, “expects that non-farm payrolls fell by 7500k in May, lifting the unemployment rate to around 20.0%. In this period of heightened labor market volatility, the participation rate will play an important role in determining where the unemployment rate ultimately lands. With rising job losses and increasing spare capacity, May average hourly earnings are expected to slow to 1.0% after April’s spike.”
Technical analysis
With the RSI divergence joining repeated failures to cross 0.7000 round-figure, bulls are waiting for a clear break above the psychological mark to target January month top near 0.7050. A downside break below the early-January low near 0.6850 could trigger fresh pullback moves toward the February month top near 0.6775.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.