AUD/USD jumps to 0.71 as greenback erases NFP-led gains after Powell comments


  • Powell said Fed will reassess strategy if downside risks increase.
  • US Dollar Index pares gains, falls toward 96.
  • December NFP growth beats estimates by a wide margin.

After turning negative on the day near 0.7020 following the strong employment data from the United States, the AUD/USD pair rose sharply in the last hour as the greenback came under heavy selling pressure on FOMC Chairman relatively dovish comments. The pair, which touched its highest level since December 21 at 0.7110, was last seen trading at 0.7095, adding 1.3% on a daily basis.

Earlier today, the U.S. Bureau of Labor Statistics reported that nonfarm payrolls increased by 312K in December and the annual wage inflation rose to 3.2% with both data surpassing analysts' estimates. With the initial market reaction, the US Dollar Index quickly retraced its daily fall and rose to 96.60. However, FOMC Chairman Powell comments forced the index, which is now down 0.1% on the day at 96.17, to reverse its course.

Speaking in a conference in Atlanta, Fed chief Powell said that they were ready to adjust the monetary policy if data suggested that downside risks were increasing and added that they could use all the tools as appropriate in a future crisis.

Additionally, the strong upsurge witnessed in major equity indexes in the U.S. help risk-sensitive currencies outperform their rivals in the last session of the first week of 2019.

Technical levels to consider

The pair could encounter the initial resistance at 0.7110 (daily high) ahead of 0.7150 (Dec. 20, 2018, high) and 0.7200 (Dec. 28 high). On the downside, supports are located at 0.7040 (7-DMA), 0.7000 (psychological level) and 0.6920 (Jan. 3 low).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD turns below 1.10 as market mood eases

EUR/USD has dropped below 1.10 as the market mood improves. Earlier, it hit three-week highs as the stock market crash and rush into bonds is raising the chances of the US Fed cutting rates. Further coronavirus headlines are awaited.

EUR/USD News

GBP/USD hits new 2020 low amid Brexit rhetoric, coronavirus headlines

GBP/USD has dipped below 1.2850, hitting a new 2020 low as concerns about a no-trade-deal Brexit are weighing on the pound. Coronavirus-linked USD weakness is minimal in this pair.

GBP/USD News

XAU/USD tumbles near two-week’s lows, sub-$1600/oz

Gold has been dropping sharply this Friday while reaching the 200 SMA on the four-hour chart. XAU/USD bulls gave up as sellers took the market down sharply. The bears seem to be in charge and more down could potentially be expected. 

Gold News

WTI remains under pressure around $45.00

Nothing new around crude oil prices, with rising concerns on the Chinese COVID-19 and its potential impact on the economy and the demand for the commodity keeping traders’ sentiment well depressed.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures