AUD/USD: holding near weekly highs but below Friday's top

AUD/USD Current price: 0.7120

  • Australian employment data surprised to the upside, signs of wage growth pressures.
  • Equities and base metals keeping the AUD/USD pair near the 0.7200 figure.

The Aussie extended its recovery overnight, reaching 0.7199 against the greenback following the release of a solid August employment report which showed that the economy added 44,000 new jobs, largely beating the market's forecast of 15,000. 33,700 of those were in full-time positions. The unemployment rate remained steady at 5.3%, despite the participation rate rose by more-than-expected, up to 65.7%, while underutilization fell to 13.4%, the lowest level in over five years, this last an encouraging sign of future wage growth. Also, the consumer inflation expectations for September, according to the Melbourne Institute, resulted at 4.0% matching August figure.  The pair was unable to surpass the 0.7200 figure, and despite retracing right after testing it, holds nearby and above 0.7165, the immediate static support.

Upcoming central banks' announcements could make some noise, but usually, their effect on the AUD/USD pair is limited. More relevant, could be US inflation and its potential effect on equities and base metals, which by default will affect the Aussie.

Meanwhile, the intraday advance stalled around last Friday's high, with this week's recovery remaining as a mere correction in the middle of the dominant bearish trend. However, such correction could continue according to the 4 hours chart, as technical indicators are barely losing upward momentum near overbought reading, while the price remains well above a bullish 20 SMA. The 100 SMA in the mentioned chart maintains its bearish slope, offering a dynamic resistance now at 0.7225, while below the mentioned 0.7165, the next relevant support comes at 0.7130, where the pair found a cap earlier this week.

Support levels: 0.7165 0.7130 0.7100

Resistance levels:  0.7225 0.7260 0.7300

View Live Chart for the AUD/USD

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