• Tumbles to over 4-month lows on weaker wage-growth data.
• Fails to benefit from broad-based USD weakness/sliding US bond yields.
• Focus shifts to US CPI and monthly retail sales data.
After yesterday's brief pause, the AUD/USD pair came under some renewed selling pressure and tumbled to over 4-month lows on Wednesday.
Today's release of wage growth data from Australia fell short of consensus estimates and grew 0.5% in the third quarter. As an important input for overall inflation, the market reaction to today’s release clearly suggests having a dovish implication on the monetary policy and prompted some fresh selling.
Adding to this, weaker sentiment around commodity space, mainly driven by a sell-off in oil markets after the IEA slashed global demand growth forecast for 2017/2018 on Tuesday, exerted additional downward pressure on commodity-linked currencies, including the Australian Dollar.
The pair failed to benefit from persistent US Dollar selling bias, led by mounting uncertainty over the US tax legislation. Even sliding US Treasury bond yields, which tends to underpin demand for higher-yielding currencies, failed to stall the pair's slide below the 0.7600 handle for the first time since early July.
Focus now shifts to important US macro data - the latest inflation figures and monthly retail sales. With December Fed rate hike move nearly priced in the market, even a slight disappointment could trigger a fresh leg of USD downslide and provide some immediate respite for the major.
Technical levels to watch
Any recovery attempts back above the 0.7600 handle might now confront fresh supply near the 0.7620 region, above which a bout of short-covering could lift the pair towards 0.7655-60 hurdle.
On the flip side, weakness below the 0.7575-70 region now seems to drag the pair towards 0.7540 intermediate support en-route the key 0.75 psychological mark.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.