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AUD/USD slides towards 0.6900 on surprise fall in Australia’s Employment Change

  • AUD/USD takes offers to refresh intraday low, stays pressured around weekly bottom.
  • Australia’s Employment Change marked -40.9K figure, Unemployment Rate eased to 3.4% in July.
  • Market sentiment remains divided amid softer yields, mixed equities.
  • Headlines surrounding China, Taiwan joined slightly dovish Fed Minutes to test bears earlier.

AUD/USD bears the burden of another downbeat job number during Thursday’s Asian session, not to forget the fresh concerns surrounding Taiwan. That said, the Aussie pair remains pressured around 0.6935, after refreshing the daily low to 0.6924, by the press time.

Australia’s headline Employment Change dropped to -40.9K versus 25K expected and 88.4K prior while Unemployment Rate eased to 3.4% versus 3.5% expected and prior. Also, the Participation Rate declined to 66.4% versus 66.8% market forecasts and previous readings.

Also read: Breaking: Aussie jobs data was dismal in whole and a weight on AUD/USD

It’s worth noting that Aussie Wage Price Index for the second quarter (Q2) exerted downside pressure on the AUD/USD prices the previous day. That said, the data flashed 0.7% QoQ growth in Q2 to mark the fastest growth since September 2014. However, the figures remain dismal compared to the inflation numbers, which in turn justify the Reserve Bank of Australia’s (RBA) recent cautious comments.

Besides the Aussie employment data, mixed concerns surrounding China Aussie employment data, mixed concerns surrounding China also favor AUD/USD sellers.

Earlier in the day, China Securities News mentioned, “China may issue 1.5 trillion yuan in additional debt as part of an investment push.”

On the contrary, the latest comments from the US Trade Representative’s office stating, “Early this autumn, the US and Taiwan will begin formal negotiations on a trade initiative,” seem to renew the fears of the US-China tussle on sentiment.

On the same line were the statements from a top US diplomat for East Asia Kritenbrink who said, “The US is committed to maintaining peace and stability across the Taiwan strait.”

It should be noted that the Fed Minutes probed the US dollar bulls the previous day as it said, per Reuters, that officials were ready to slow the pace of interest rate hikes in tandem with signals of a slowdown in inflation. However, firmer US Retail Sales for July seemed to have exerted downside pressure on the AUD/USD prices.

Amid these plays, the US 10-year Treasury yields retreated from the weekly top surrounding 2.90%, down one basis point (bp) to 2.89% by the press time. Further, the S&P 500 Futures print mild losses after reversing from a four-month high the previous day.

The weekly prints of the US Initial Jobless Claims and Philadelphia Fed Manufacturing Survey for August could entertain the AUD/USD traders. Above all, recession fears and Fed concerns will be crucial to watch for fresh impulses.

Technical analysis

The strongest bearish MACD signals since late June join a clear downside break of the one-month-old bullish channel to keep AUD/USD bears hopeful of revisiting the yearly low of 0.6678. However, 50-DMA and May’s low, respectively around 0.6900 and 0.6825, could act as buffers to the south. Meanwhile, recovery remains elusive until the quote stays below the 200-DMA level around 0.7120. That said, the stated channel’s support line appears to have immediate resistance around 0.6990.

Additional important levels

Overview
Today last price0.6946
Today Daily Change0.0015
Today Daily Change %0.22%
Today daily open0.6931
 
Trends
Daily SMA200.6986
Daily SMA500.6927
Daily SMA1000.7069
Daily SMA2000.7146
 
Levels
Previous Daily High0.7033
Previous Daily Low0.6911
Previous Weekly High0.7137
Previous Weekly Low0.6898
Previous Monthly High0.7033
Previous Monthly Low0.668
Daily Fibonacci 38.2%0.6957
Daily Fibonacci 61.8%0.6986
Daily Pivot Point S10.6883
Daily Pivot Point S20.6835
Daily Pivot Point S30.676
Daily Pivot Point R10.7006
Daily Pivot Point R20.7081
Daily Pivot Point R30.7129

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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