AUD/USD Forecast: Australian employment data to make it or break it
AUD/USD Current Price: 0.6773
- Australia's June employment report is expected to post a modest 15K gain in June.
- Mixed Australian data and Chinese economic woes weighed on the Aussie.
- AUD/USD falls for a fourth consecutive day, aiming to test the 0.6700 region.
The Australian Dollar edged sharply lower against its American rival on Wednesday, with AUD/USD trading near a recently posted weekly low of 0.6749. Mixed Australian data weighed on the local currency, as the CB Leading Index posted a modest 0.1% increase in June, while May's reading was downwardly revised to -0.3%. Additionally, the Westpac Leading Index improved to 0.12 in June from -0.27% in the previous month. The poor performance of Asian shares also undermined demand for AUD/USD as Chinese economic woes undermined the market's sentiment.
The focus now shifts to Australian employment figures. According to the market forecast, the country is expected to have added 15K new job positions in the month, well below the previous 75.9K. Breaking down the figure, the country added 61.7K full-time positions in May and 14.3K part-time jobs. The Unemployment Rate is expected to have remained steady at 3.6% in June, while the Participation Rate is also foreseen unchanged at 66.9%.
AUD/USD short-term technical outlook
The AUD/USD pair broke below the 38.2% Fibonacci retracement of its 0.6598/0.6894 rally at 0.6780, with the next Fibonacci support at 0.6745. The daily chart shows that the pair is trading above all its moving averages, with the 20 and 200 Simple Moving Averages (SMAs) converging with the 61.8% retracement of the aforementioned rally at around 0.6710. Technical indicators, in the meantime, head south with uneven strength, still holding within positive levels.
The near-term picture is neutral. The 4-hour chart shows that AUD/USD trades below a firmly bearish 20 SMA while above the bullish, longer moving averages. At the same time, technical indicators remain within negative levels, although the Momentum advances while the Relative Strength Index (RSI) indicator consolidates at around 41.
Support levels: 0.6745 0.6710 0.6660
Resistance levels: 0.6780 0.6825 0.6870
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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.
