AUD/USD plummets to near 3-week lows, sub-0.7100 level

Haresh Menghani FXStreet

• Bulls fail to capitalize on solid Aussie jobs data-led early uptick.
• NAB's mortgage rate hike news prompts some aggressive selling.
• A modest USD uptick further aggravates the ongoing downfall.

The AUD/USD pair faded Aussie jobs data-led early uptick to an intraday high level of 0.7167 and tumbled to near three-week lows in the last hour.

The pair did get a minor lift and built on the overnight modest rebound on the back of solid domestic employment details, showing that the number of employed people in December rose by 21.6K as against 18K expected and unemployment rate surprisingly ticked lower to 5.0%.

The pair, however, failed to capitalize on the post-data up-move, rather bears took back control after a major Australian bank - National Australia Bank said it will raise the standard variable rate for owner-occupiers repaying principal and interest by 0.12% to 5.36 %.

The move comes months after Commonwealth Bank, Westpac, and ANZ imposed out-of-cycle hikes and was seen as further hurting the domestic housing market, which might force the RBA to lower interest rates and eventually weighed heavily on the Aussie.

Meanwhile, a modest US Dollar uptick, despite a weaker tone around the US Treasury bond yields, aggravated the selling pressure and further collaborated to the pair's sharp intraday slide to sub-0.7100 level.

In absence of any major market moving economic releases from the US, a follow-through weakness, led by some fresh technical selling below the mentioned handle, now looks a distinct possibility.

Technical levels to watch

Immediate support is now pegged near the 0.7070 area, below with the downward trajectory could further get extended towards the 0.7025-20 region en-route the key 0.70 psychological mark. On the flip side, any attempted recovery might now confront immediate resistance near the 0.7120-25 region and is followed by the 0.7160-70 heavy supply zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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