AUD/USD: bearish, dollar's weakness prevents a steeper slump

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7556

Australian economy lost 20.6K fulltime jobs, hurting the local currency.
Chinese retail sales, industrial production grew by less-than-expected also weighing on the Aussie.

The Aussie fell overnight against the greenback, although the pair held above the post-Fed's low of 0.7528. Softer than expected Australian employment figures and disappointing Chinese ones were behind the decline. The Australian economy added 12.0K new jobs in May, below the 18.0K expected, but the figure was the result of a 20.6K decline in fulltime employment, and 32.6K new part-time positions bad news for the local economy. The unemployment rate fell to 5.4% as a result of a decreasing participation rate, failing to impress. In China, Retail Sales were up 8.5% in May, well below the expected 9.6% advance. Industrial Production also grew by less-than-expected up 6.8% vs. the March gain of 7.0%. Adding weight on the pair are worldwide equities, which entered a selling spiral post-Fed.

A broadly weaker dollar prevents the pair from extending its decline, but the technical picture is bearish, with the price hovering right below the 0.7565 level, a major Fibonacci resistance, also below its 20 and 100 SMA in the 4 hours chart. The Momentum indicator heads lower in bearish territory, while the RSI lost directional strength but hovers around 40, also supporting a downward extension ahead, particularly on a break below 0.7528, Wednesday's low.

Support levels: 0.7530 0.7505 0.7470

Resistance levels: 0.7565 0.7590 0.7625

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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