AUD/USD is at critical 0.76 level ahead of trade balance

AUD/USD is currently testing the 0.7620 resistance as bulls attempt to hang in there after a large amount of supply over the past few sessions.

AUD/USD dropped from the midway point of the handle yesterday and went on to score a low of 0.7592 overnight before scrambling back to 0.7630 where bulls ran out of steam as the US dollar picked up on good data ahead of this week's showdown in the nonfarm payrolls that will come out on Friday in the US session. This data is widely expected to be relatively solid and could be a catalyst for a rally in the greenback as markets increase the best for a 2016 rate hike from the Fed. For today, we have Australia's trade balance for August and the median estimate is$2.3bn while both exports and imports are expected to fall slightly.

Analysts at Westpac offered a market outlook for the Aussie:

"AUD/USD 1 day: The trade balance poses minor event risk for the AUD today. Otherwise it looks like it wants to retest 0.7600, a resurgent US dollar the main factor.

AUD/USD 1-3 month: While further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there's a case for a correction towards 0.74 if the Fed tightens in December as we expect. (13 Sep)."

AUD/USD levels

AUD/USD is testing the 0.7600 level and a break of here opens up the downside to 0.7560 while the 200 day ma and the 2016 support line at 0.7460/23. "This remains a critical break down point to the 0.7146 May low," explained analysts at Commerzbank. Meanwhile, spot is presently trading at 0.7619, and next resistance can be seen at 0.7620 (Hourly 20 EMA), 0.7622 (Daily Open), 0.7625 (Daily High), 0.7640 (Daily Classic PP) and 0.7643 (Hourly 100 SMA). Support below can be found at 0.7619 (Weekly Low), 0.7616 (Daily 20 SMA), 0.7609 (Daily Low), 0.7596 (Weekly Classic S1) and 0.7593 (Yesterday's Low).