- AUD/USD keeps its range close to weekly lows above 0.6900.
- USD trades firmer amid risk-off mood, Australian jobs weigh on the aussie.
- The aussie could see a dead cat bounce but 50 DMA remains at risk.
AUD/USD is off the lows but remains in the red, as bears lick their wounds following the downside surprise in the Australian headline Employment Change data.
The Australian Employment Change arrived at -40.9K in July vs. 25K expected and 88.4K previous. The country’s participation rate dropped to 66.4% vs. a steady reading of 66.8% expected.
The jobs data combined with Wednesday’s downbeat Wage Price Index could likely dissuade the RBA to go aggressive on its policy tightening path. Additionally, the US-China trade risks over Taiwan and recession fears also add to the pain in the higher-yielding aussie dollar.
The renewed strength in the US dollar amid risk-aversion and cautious Fed minutes will also keep AU/USD on a slippery slope ahead of the Jobless Claims and Fedspeak.
From a short-term technical perspective, the pair failed to find acceptance above the mildly bullish 21-Daily Moving Average (DMA) at 0.6979.
Since then, sellers have flexed their muscles, putting the critical 50 DMA support of 0.6896 at risk. Bears need to crack the recent range lows near 0.6910 to take on the latter.
The 14-day Relative Strength Index (RSI) is trading flatlined, having cut the midline for the downside on Wednesday, indicating that more losses could be in the offing.
Therefore, it could be safe to say that the sell-off triggered following a rejection at a critical horizontal 200-Daily Moving Average (DMA) at 0.7120 may be facing exhaustion.
AUD/USD: Daily chart
On the flip side, the immediate resistance is seen at the 0.6950 psychological level, above which the horizontal 100 DMA at 0.6963 will be challenged.
Further up, the upward-sloping 21 DMA at 0.6979 will then test the bearish commitments.
AUD/USD: Additional levels to consider
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.