AUD/USD stays under pressure around 0.6830 while beginning the NFP day

AUD/USD declines to 0.6830 during the initial Friday morning in Asia. The quote stretches losses made on Thursday as the second-tier Aussie data becomes the latest disappointment.

Be it the third quarter (Q3) growth figures or retail sales and trade balance, not to forget the latest AiG Performance of Construction Index that dropped to 40 from 43.9, majority fundamentals concerning the Australian economy have been downbeat off-late.

This has led to major banks including Westpac, Commonwealth Bank, the Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) to step up their forecasts for the Reserve Bank of Australia’s (RBA) rate cuts.

Also exerting the downside pressure on the pair is market’s lack of belief in the upbeat trade statements from the United States (US) as media reports like the latest one from the Wall Street Journal (WSJ) and Chinese authorities pour cold water on the trade optimism.

Even so, the US 10-year treasury yields seesaw around 1.80%, after a gain of two basis points (bps), while S&P 500 Futures stay positive 0.20% near 3,117.

Limiting the pair’s downside was the US dollar (USD) weakness on the back of downbeat data, the market’s pessimism surrounding the US-China phase-one trade deal.

Looking forward, markets are less likely to have any major moves as a lack of any data/event at home joins the cautious sentiment ahead of the key US employment data. Upbeat forecasts of the headline Non-farm Payrolls (NFP), like 180K, is likely to be watered down if we closely observe the early indicators like ADP employment change. Other than that, no change is expected in Average Hourly Earnings and Unemployment Rate figures while the monthly print of Michigan Consumer Sentiment Index could soften to 96.5 from 96.8 earlier.

Technical Analysis

100-day Simple Moving Average (SMA) near 0.6810 acts as immediate support, a break of which could drag prices to November month low near 0.6755. On the upside, 0.6900 holds the key to pair’s run-up towards 200-day SMA level of 0.6915 and the previous month top close to 0.6930.