AUD/USD bears look to 0.7000 on firmer yields ahead of US NFP


  • AUD/USD remains depressed after seven-day south-run around yearly low.
  • Fed hawks fuelled yields, equities consolidate losses amid mixed concerns over Omicron.
  • Aussie, China PMIs can offer intermediate moves during pre-NFP trading lull.

AUD/USD traders flirt with the 0.7100 threshold after seven consecutive days of a south-run. That said, the risk barometer struggled for a clear direction the previous day despite posting mild losses on firmer Treasury yields. Though, equity bulls stopped the quote’s weakness as Aussie traders brace for the key Friday comprising the US Nonfarm Payrolls (NFP) data.

The benchmark US 10-year Treasury yields bounced off a 10-week low to regain 1.45% level, up five basis points (bps), on Thursday as Fedspeak pushed for sooner tapering in the last-ditched efforts before the silent-period starting from this Saturday. Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin.

It’s worth noting that softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November, also underpinned the hopes of faster Fed tapering and favored the yields.

The firmer bond coupons in turn propelled the US Dollar Index (DXY) to print a second consecutive day of gains but couldn’t stop equities from consolidating the previous two days’ losses.

At home, Australia Trade Balance and housing numbers came in stronger but the Imports and PMI details were mixed for October and November respectively. That said, the Pacific major is alert enough to tame the virus outbreak, with various state boundaries and checks announced of late.

Also important for the AUD/USD traders to know is the fact that multiple Chinese developers were bracing for the bond issue, suggesting relief for the cash-crunch market. Adding to the positives was the news that China will prolong the period of tax exemption for foreign bond investors. Furthermore, chatters that the UK announced SOTOVIMAB, an injectable drug, to be effective against Omicron joins the US policymakers’ rush to avoid government shutdown to ease the market fears and favor the risk-barometer pair.

That said, AUD/USD traders may react to China’s Caixin Services PMI but major attention will be given to the virus updates. Above all, the US jobs report for November will be a make-or-break case to follow.

Read: Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision

Technical analysis

Having offered a clear downside break of yearly support, AUD/USD is well-set for 0.7000-0.6990 support zone comprising lows marked during September and November 2020. The 0.7050 levels may offer an intermediate halt during the fall.

Should the bulls return, the previous support line near 0.7145 and the monthly descending trend line surrounding 0.7175 will challenge the corrective pullback.

Additional important levels

Overview
Today last price 0.7094
Today Daily Change -0.0001
Today Daily Change % -0.01%
Today daily open 0.7095
 
Trends
Daily SMA20 0.7265
Daily SMA50 0.7334
Daily SMA100 0.7333
Daily SMA200 0.7507
 
Levels
Previous Daily High 0.7174
Previous Daily Low 0.7094
Previous Weekly High 0.7273
Previous Weekly Low 0.7111
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7125
Daily Fibonacci 61.8% 0.7143
Daily Pivot Point S1 0.7068
Daily Pivot Point S2 0.7041
Daily Pivot Point S3 0.6988
Daily Pivot Point R1 0.7148
Daily Pivot Point R2 0.7201
Daily Pivot Point R3 0.7228

 

 

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