• Australia employment data next week expected to show 40K new jobs added in August.
  • Victoria’s plan to ease lockdown measures extends into next November.
  • AUD/USD holds near the year high but needs to clear the 0.7330 resistance level.

The AUD/USD pair is heading into the weekly close trading just below the 0.7300 level, trimming early losses but lacking follow-through. The pair bottomed on Wednesday at 0.7191, as the greenback found strength in a risk-off sentiment,  later bouncing in the aftermath of the ECB’s decision, which brought some relief to equities’ markets.

The Australian macroeconomic calendar was scarce, and data coming from the country were mixed, failing to provide support to the Aussie. Meanwhile, tensions elsewhere and central bankers highlighting the persistent uncertainty capped the interest on the pair.

Tensions with China and COVID-19

Mounting tensions between the country and its neighbour China had exacerbated the uncertainty surrounding the Australian future. The latest scandal is related to two Australian journalists,  Bill Birtles, from the ABC, and Mike Smith, from the Australian Financial Review, where evacuated from the country after Beijing detained another journalist working for Chinese state media.

On some positive news, the country seems to have curved the latest coronavirus outbreak, with less than 100 new cases per day reported this week. However, the quarantine around Victoria continues, and the latest road-map out of the current lockdown which extends into November, depending on the number of active cases. Victoria has roughly 25% of the country’s population and is responsible for 23% of the country’s GDP. The longer the lockdown, the largest the harm to the country’s growth.

Gold prices, in the meantime, are set to finish the week little changed, with spot trading around $1,950 a troy ounce, failing to provide clues to AUD/USD trades.

Unimpressive data

Australia released these days the September Consumer Inflation Expectations, which decreased to 3.1% from 3.3% in the previous month. It also unveiled Westpac Consumer Confidence that recovered from -9.5% to 18%. The NAB’s Business Confidence also improved, from -14 to -8, although NAB’s Business Conditions deteriorated from 0 to -6.

Next Tuesday, the RBA will publish the Minutes of its latest Meeting and may provide additional clues on whatever policymakers are planning with an extended lockdown in the largest state of the country. Next Thursday, Australia will publish  August employment data. The country is expected to have added just 40K new jobs in the month, while the unemployment rate is expected to jump to 7.8%. China will publish next Tuesday, August Industrial Production, and Retail Sales for the same month.

AUD/USD Technical Outlook

The Aussie bullish momentum receded, but the pair is far from indicating an upcoming decline, at least in the longer term. The weekly chart shows that it has advanced above a flat 200 SMA for the first time since March 2018. The 20 SMA is crossing above the 100 SMA, both below the larger one, indicating that bulls retain control of the pair. The Momentum indicator heads firmly lower within positive levels, rather reflecting the absence of follow-through that suggesting a slide. The RSI indicator, in the meantime, consolidates around 66.

In the daily chart, the pair presents a neutral-to-bullish bias, as it has spent the week hovering around a mildly bullish 20 DMA, while the larger ones stand far below this last. Technical indicators in the meantime, stand within positive levels but lack directional strength.

The weekly low is the immediate support level, followed by 0.7130. Below this last, the slide can extend towards the 0.7000 level. The pair needs now to surpass 0.7330 to be able to extend its gains towards the 0.7410 price zone.

AUD/USD sentiment poll

According to the FXStreet Forecast Poll, the Aussie will come under selling pressure next week, as 70% of the polled experts are betting for lower targets. However, the pair is seen holding above the 0.7000 threshold. Bears retain control in the monthly and quarterly perspectives, although in both cases they represent less than the 50% of the polled experts. On average, the pair is seen holding well above 0.7100.

The Overview chart shows that the weekly moving average heads firmly south, although the longer-term positive momentum prevails in the wider perspectives. The range of possible targets has somehow shrunk, which skews the risk to the upside.

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD tumbles to one-month low as ECB signals stimulus

EUR/USD has dropped below 1.17, to the lowest since late September. The ECB expressed concern about the spread of covid and signaled more stimulus in December. Earlier, US GDP beat estimates. The US elections are eyed.

EUR/USD News

GBP/USD tumbles below 1.30 as market mood worsens

GBP/USD has dropped below 1.30, reversing its Brexit-related gains. Growing concerns about coronavirus in the UK and the US elections are weighing on the pound.

GBP/USD News

Gold depressed near 1-month lows, below $1870 level post-US GDP

Resurgent USD demand prompted some fresh selling around gold on Thursday. The USD stood tall following the release of upbeat US third-quarter GDP report. The US economy expanded by 33.1% annualized pace as against 31% expected. 

Gold News

US GDP Quick Analysis: No V-shaped recovery despite 33.1% leap, covid looms over markets

The best quarter in history – following the worst one. Gross Domestic Product jumped by an annualized rate of 33.1%, above expectations. That included a surge of 40.7% in personal consumption, a core component of the economy. 

Read more

WTI collapses to $35.00, new 4-month lows

Prices of the WTI drops to 4-month lows near the $35.00 mark per barrel in the second half of the week as traders continue to track the unremitting advance of the coronavirus pandemic and its impact on the demand for the commodity.

Oil News

Forex Majors

Cryptocurrencies

Signatures