AUD/USD outlook: Australian Dollar came under increased pressure from weak labor data
AUD/USD
Australian dollar fell almost 1% against its US counterpart during Asian / early European session on Thursday, deflated by disappointing labor data.
Australian unemployment jumped unexpectedly in June, hitting the highest in 3 ½ years, while employment rose marginally, contributing to negative picture.
Weak labor data boost expectations for more rate cuts, although the policymakers are likely to be more cautious and look for more evidence about inflation (Q3 report is due end of July) before taking an action.
Today’s drop was significant (the pair is on track for one of the biggest daily losses since Apr 4 collapse) as it broke below recent range floor (0.6556, also 50% retracement of 0.6372/0.6594 upleg) but found support at daily Ichimoku cloud top (0.6463).
Massive daily cloud (spanned between 0.6463 and 0.6230) provides very solid support and very strong headwinds to fresh bears, which are likely to contain current dip.
In such scenario, immediate downside risk would be diminished and would keep the price in extended consolidation within already defined range.
Conversely, penetration and closing within the cloud would weaken near term structure and allow for deeper pullback.
Daily studies are mixed as cloud continues to underpin while momentum turned negative, while MA’s are in mixed setup and lack clearer direction signal at the moment.
Res: 0.6483; 0.6530; 0.6575; 0.6592.
Sup: 0.6463; 0.6434; 0.6407; 0.6372.
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Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
