AUD/USD remains bullish, extends post-NFP recovery

Eren Sengezer FXStreet

Following Friday's positive daily closing, the AUD/USD is looking to extend gains for the second day in a row amidst a softer tone in the greenback. At the moment, the AUD/USD is up 0.5% at 0.7580, a tad below its daily high of 0.7589.

RBA to stay on hold

Today, the Australian Treasurer Scott Morrison speaking in a Bloomberg TV interview, argued that the biggest worry about the economy is low wage growth and said that they are working to ease pressure on house prices - spoke with regulators about housing debt.

Already there is talk that the Australian Prudential Regulation Authority (APRA), could lower the threshold for total lending to property investors to 7% year on year from 10 per cent at present, according to Philip Baker, an associate editor at Australian Financial Review. He also adds that If APRA does more on that front, it allows the bank (RBA) to keep the official cash rate low while the inflation rate remains so far below its target rate.

Current Fed view hasn't changed

Although the greenback seems to be under pressure since the NFP numbers on Friday, market expectations for a rate hike on Wednesday haven't changed much. The CME Group FedWatch Tool shows that the March hike probability is at 88.6% at the moment, down from Friday's 93%.

Critical levels

The AUD/USD is facing the first resistance at 0.7600/10 (psychological level/50-DMA), ahead of 0.7620 (20-DMA), and 0.7700 (psychological level/Mar. 1 high). On the downside, the first support is aligned at 0.7515 (Fib. 38.2% of Jan. to late Feb. uptrend) followed by 0.7495 (100-DMA) and finally 0.7450 (Fib. 50%).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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