- AUD/USD edges lower for the second successive day, though lacks follow-through selling.
- A modest USD strength and the cautious market mood weigh on the risk-sensitive Aussie.
- Traders keenly await the release of the closely-watched US monthly jobs data (NFP report).
The AUD/USD pair extends the previous day's pullback from the 0.7155-0.7160 area, or its highest level since June 2022 and remains under some selling pressure for the second successive day on Friday. The pair remains depressed heading into the European session and is currently placed near the lower end of its daily range, just above mid-0.7000s.
A further US Dollar recovery from a nine-month low touched on Thursday turns out to be a key factor weighing on the AUD/USD pair. The better-than-expected Weekly Initial Jobless Claims data from the US raises the possibility of strong Nonfarm Payrolls (NFP) data and prompts traders to lighten their USD bearish bets. The popularly known NFP report is scheduled for release later during the early North American session and will play a key role in influencing the near-term USD price dynamics.
A surprisingly stronger print will further point to the underlying strength in the US labor market and force investors to re-evaluate their expectations for future rate hikes by the Fed. It is worth mentioning that the markets expect the Fed to reverse its hawkish stance amid concerns that headwinds stemming from rising borrowing costs could lead to a sharp economic slowdown. This led to a sharp USD fall following the announcement of the FOMC monetary policy decision on Wednesday.
The anxiety heading into the key data is evident from the prevalent cautious mood around the equity market. This is seen as another factor benefitting the safe-haven greenback and undermining the risk-sensitive Aussie. Spot prices, however, manage to hold comfortably above the 0.7000 psychological mark and the weekly low, warranting some caution for aggressive bearish traders. Hence, it will be prudent to wait for strong follow-through selling before confirming that the AUD/USD pair has topped out already and positioning for any meaningful corrective decline in the near term.
Technical levels to watch
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
USD/JPY pops and drops on BoJ's expected hold
USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.
AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood
AUD/USD attacks 0.6800 in Friday's Asian trading, extending its gradual retreat after the PBOC unexpectedly left mortgage lending rates unchanged in September. A cautious market mood also adds to the weight on the Aussie. Fedspeak eyed.
Gold consolidates near record high, bullish potential seems intact
Gold price regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's decision to start the policy easing cycle with an oversized rate cut.
Ethereum rallies over 6% following decision to split Pectra upgrade into two phases
In its Consensus Layer Call on Thursday, Ethereum developers decided to split the upcoming Pectra upgrade into two batches. The decision follows concerns about potential risks in shipping the previously approved series of Ethereum improvement proposals.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.