AUD/USD Current price: 0.7091
- Australian solid employment data offset by speculation the RBA may need to cut rates.
- Global economic growth concerns took their toll on a weakened Aussie.
The Aussie started the day with a strong footing, advancing against the greenback up to 0.7166, on the back of a solid employment report which showed that the Australian economy added 21.6K new jobs in December, better than the 16.5K expected. The unemployment rate decreased to 5.0%, although the participation rate was also down to 65.6% from 65.7%. The pair suffered a sharp U-turn and fell, as the National Australia Bank rose its interest rated for home loans. The move followed other major banks that increase their rates in September. The hike of mortgage rates in a depressed housing market triggered speculation that the RBA may need to lower its rates to offset the impact on borrowers, hence, the slump in AUD. Dollar's strength was exacerbated during London's trading hours, as EU worse-than-expected Markit PMIs exacerbated concerns about a global economic slowdown. Also, IMF's Lagarde, speaking at Davos, said that Chinese economic slowdown is real, and despite under control, would constitute a risk.
The US Senate will meet today to vote a funding extension until February 8. There were rumors making the rounds about lawmakers discussing Trump's border wall funding, but there were later denied. So far, US President Trump has rejected funding bills coming from the Houses and seems unlikely this time it will different. In the data front, attention will center on the January preliminary Markit PMIs., with the Composite index foreseen at 54.2 vs. the previous 54.4.
Trading around its daily lows, the pair has detached from the congestion of moving averages in the 4 hours chart, all of them in the 0.7130/40 price zone, usually a sign of directional strength, in this case, to the downside. Technical indicators in the mentioned chart hold within negative levels, with the Momentum directionless but the RSI also backing a downward extension as it maintains its bearish slope near 31. The pair has also broken below the 23.6% of its latest bullish run at 0.7125, the immediate resistance. The bearish case will be stronger on a break below 0.7070, a strong static support level.
Support levels: 0.7070 0.7035 0.7000
Resistance levels: 0.7155 0.7210 0.7250
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.