AUD/USD slides beneath 0.7000 threshold on softer Australia wage data
|- AUD/USD takes offers to refresh intraday low after downbeat Australia Wage Price Index.
- The economic indicator missed strong market expectations in Q2.
- US dollar pullback ahead of Fed Minutes adds strength to the upside momentum.
- US Retail Sales, risk catalysts are also crucial for clear directions.
AUD/USD fails to justify the previous day’s bullish Doji as it renews intraday low near 0.6990 after Australia’s Wage Price Index for the second quarter (Q2). Also exerting downside pressure on the Aussie pair is the mixed sentiment ahead of the US Retail Sales and Fed Minutes.
The Aussie Q2 Wage Price Index reprinted 0.7% QoQ growth while missing 0.8% expectations. Further, the YoY figures also eased below market forecasts of 2.7% to 2.6%, versus 2.4% YoY prior.
While tracking the Aussie data and the market’s indecision, the AUD/USD pair ignores the US dollar moves.
That said, the US Dollar Index (DXY) refreshed its three-week high before reversing from 106.94, down 0.05% near the intraday low of 106.40 at the latest. The DXY losses could be linked to the market’s preparations for today’s US Retail Sales for July, expected 0.1% versus 1.0% prior, and the Federal Open Market Committee (FOMC) meeting minutes. It’s worth noting that the recent weakness in the US data challenges the hawkish hopes from the Fed, the same highlights today’s Fed Minutes.
Also read: Australian Wage Price Index: +0.7% vs. expected +0.8%, AUD/USD drops 20 pips
Elsewhere, gains in mining shares should have favored the Aussie equity traders even as a sharp drop in biomedical giant CSL Ltd. challenges the bulls. On the same line could be China’s readiness for multiple measures to tame recession woes, even if the markets have little belief that the dragon nation could avoid economic slowdown.
Amid these plays, S&P 500 Futures struggle for clear directions near a four-month high while the US 10-year Treasury yields seesaw around 2.82% after snapping a two-day downtrend the previous day.
Looking forward, headlines concerning China and recession will be important for the AUD/USD traders ahead of Thursday’s Aussie jobs report, not to forget the FOMC Minutes and US Retail Sales.
Technical analysis
Sustained recovery from a four-month-old previous resistance line, at 0.6990 by the press time, keeps AUD/USD buyers hopeful of marking another battle with the 200-DMA hurdle surrounding 0.7120.
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