AUD/USD Price Analysis: 50 DMA remains a tough nut to crack for bears
|- AUD/USD keeps its range close to weekly lows above 0.6900.
- USD trades firmer amid risk-off mood, Australian jobs weigh on the aussie.
- The aussie could see a dead cat bounce but 50 DMA remains at risk.
AUD/USD is off the lows but remains in the red, as bears lick their wounds following the downside surprise in the Australian headline Employment Change data.
The Australian Employment Change arrived at -40.9K in July vs. 25K expected and 88.4K previous. The country’s participation rate dropped to 66.4% vs. a steady reading of 66.8% expected.
The jobs data combined with Wednesday’s downbeat Wage Price Index could likely dissuade the RBA to go aggressive on its policy tightening path. Additionally, the US-China trade risks over Taiwan and recession fears also add to the pain in the higher-yielding aussie dollar.
The renewed strength in the US dollar amid risk-aversion and cautious Fed minutes will also keep AU/USD on a slippery slope ahead of the Jobless Claims and Fedspeak.
From a short-term technical perspective, the pair failed to find acceptance above the mildly bullish 21-Daily Moving Average (DMA) at 0.6979.
Since then, sellers have flexed their muscles, putting the critical 50 DMA support of 0.6896 at risk. Bears need to crack the recent range lows near 0.6910 to take on the latter.
The 14-day Relative Strength Index (RSI) is trading flatlined, having cut the midline for the downside on Wednesday, indicating that more losses could be in the offing.
Therefore, it could be safe to say that the sell-off triggered following a rejection at a critical horizontal 200-Daily Moving Average (DMA) at 0.7120 may be facing exhaustion.
AUD/USD: Daily chart
On the flip side, the immediate resistance is seen at the 0.6950 psychological level, above which the horizontal 100 DMA at 0.6963 will be challenged.
Further up, the upward-sloping 21 DMA at 0.6979 will then test the bearish commitments.
AUD/USD: Additional levels to consider
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