AUD/USD drops back to 0.7300 ahead of Aussie employment data
- AUD/USD trims Wednesday’s mild gains following a U-turn from 0.7332.
- Wall Street turns red during the last hours as virus conditions worsen in the US.
- Vaccine hopes gain momentum with Pfizer’s 95% effective rate, Aussie-China tussle continues.
- Australian jobs report for October, virus/vaccine updates will be the key.
With a recent drop of 20 pips, AUD/USD retests 0.7300 round-figure at the start of Thursday’s Asian session. The aussie pair barely ignored intraday losses the previous day as the latest coronavirus (COVID-19) updates from the US have been worrisome. The same reversed initial gains secured over the vaccine hopes.
Fresh restrictions in New York, 250,000 COVID-19 deaths…
With the BNO news’, citing official figures, US covid tally marking 250,000 deaths so far, trading sentiment turned negative off-late. Earlier in the day, New York announced extra restrictions on schools to tame the pandemic. Elsewhere, officials from Tokyo also signaled readiness to announce the highest alert level after the latest count jumped around 50 on a day.
On the positive side, Pfizer conveyed a 95% effective rate for its virus, making it near to Moderna’s 94.5% mark. Updates from Oxford-AstraZeneca are also likely to arrive soon and positive. The vaccine research has recently been battling the bears.
Other than the vaccine and virus updates, fears of a full-fledged trade war between Australia and China also weighed on global trading sentiment. On Wednesday, RBA Governor Philip Lowe cited the need to overcome the differences.
Talking about data, upbeat prints of the US housing market numbers for October followed the record low Q3 Wage Price Index from Australia.
Against this backdrop, Wall Street marked another day of losses by the end of Wednesday’s trading whereas the US 10-year Treasury yields dropped to 0.86% with the latest declines.
Moving on, Australia’s October month employment numbers will be the key as the government’s employment helping program ends in the Pacific major. Forecasts suggest the headline Employment Change drop further by -30K versus -29.5K prior whereas Unemployment Rate is expected to have risen from 6.9% to 7.2% during the stated month.
Read: Australian Employment Preview: Labor market recovery in doldrums
Given the anticipated weakness in the key Aussie data, coupled with the latest shift in the risk, AUD/USD bears can stay hopeful. Though, qualitative catalysts become to be the key to watch.
Technical analysis
Repeated failures to cross the 0.7340/45 upside hurdle direct AUD/USD sellers toward the weekly low near 0.7220. Though, any further weakness will confirm “double top” formation and can drag the quote to the late-October tops near 0.7180.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
