AUD/USD corrects to near 0.6550 amid caution ahead of US NFP

AUD/USD drops to near 0.6550 as investors turn cautious ahead of US labor market data.
Resilience in the US labor market and oil recovery could discomfort Fed policymakers.
The RBA conveyed that inflation is moving positively towards 2%, reaching the target by late 2025.

Sagar Dua FXStreet

The AUD/USD pair corrects sharply after facing tough barricades around 0.6590 in the European session. The Aussie asset drops as the US Dollar Index (DXY) rebounds confidently ahead of the United States Nonfarm Payrolls (NFP) data, which will be published at 12:30 GMT.

S&P500 futures added some significant gains in London, portraying strength in US equities as investors digest Fitch’s downgrade to the US government long-term debt rating. The US Dollar Index (DXY) rebounds after discovering significant strength near 102.40 as investors hope outperformance from the labor market report.

Analysts at TD Securities see payrolls have clearly lost momentum over the past year, but they remain above levels that are consistent with a gradual rise in the Unemployment Rate. Economists forecast the jobless rate to drop again to 3.5% following its unexpected jump to 3.7% in May, as the participation rate to remain largely steady at 62.6% amid still strong job creation. Wage growth likely fell to 0.3% monthly, dragging the annual pace lower at 4.2% from 4.4% in June.

Resilience in the US labor market could discomfort Federal Reserve (Fed) policymakers as chances of a recovery in inflationary pressures will emerge. Also, global oil prices are showing strength after a stellar recovery for further gains. US inflation has already come all the way from 9.1% to below 4% but labor market resilience and oil recovery could heat up and trigger a recovery.

Meanwhile, less-hawkish Reserve Bank of Australia (RBA) minutes of August monetary policy fails to provide support to the Australian Dollar. RBA policymakers conveyed that some further tightening may be required. Australian central bank conveyed that inflation is moving positively towards 2%, reaching a target by late 2025.

AUD/USD

Overview
Today last price	0.6547
Today Daily Change	-0.0003
Today Daily Change %	-0.05
Today daily open	0.655

Trends
Daily SMA20	0.6727
Daily SMA50	0.67
Daily SMA100	0.669
Daily SMA200	0.6733

Levels
Previous Daily High	0.6569
Previous Daily Low	0.6514
Previous Weekly High	0.6821
Previous Weekly Low	0.6623
Previous Monthly High	0.6895
Previous Monthly Low	0.6599
Daily Fibonacci 38.2%	0.6548
Daily Fibonacci 61.8%	0.6535
Daily Pivot Point S1	0.652
Daily Pivot Point S2	0.649
Daily Pivot Point S3	0.6466
Daily Pivot Point R1	0.6575
Daily Pivot Point R2	0.6599
Daily Pivot Point R3	0.6629

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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