AUD/USD steadies around 0.7270 but at risk of further losses


  • AUD/USD trades firmly on the back foot on Thursday, amid a broad pick up in USD on an apparent uptick in pandemic/lockdown concerns.
  • AUD underperforms within the G10 despite blockbuster October labour market data numbers.
  • Aussie State South Australia going into a circuit breaker lockdown is likely weighing, the pair eyes a test of recent lows at 0.7220.

AUD/USD trades firmly in the red around 0.7270 and is the worst G10 performing currency on the day. The pair trades lower by roughly 30 pips or 0.4%.

Aussie ignores blockbuster jobs data, likely due to Covid-19 concerns

The Australian labour market performed significantly better than expected in October, with the economy adding 178.8K jobs versus expectations for job losses of 30K. Promisingly, much of this rise was driven by gains in full-time employment, which rose by 97K. Moreover, unemployment rose only very slightly to 7.0%, lower than the expected rise to 6.9%. The increase in the unemployment rate despite the economy adding nearly 180K jobs on net in October can be explained by a jump in the participation rate to 65.8% from 64.8%, the second-largest jump on record (after July’s 1.1% jump from 62.9% to 64.%). The Australian participation rate is pretty much now back to pre-Covid-19 levels.

Though Thursday’s economic data was better than pretty much anyone could have hoped for, AUD is an underperformer on Thursday. A broad risk-off feel to markets and pick up in the US dollar has been one factor working against the risk-sensitive AUD; market focus seems to have returned to the growing near-term economic risks presented by the continued spread of Covid-19 in the US (NYC announced the closure of schools close to the end of Wednesday’s US session, triggered stock market downside) and elsewhere.

Indeed, concerns regarding the spread of the virus in Japan are rising, with Tokyo at record numbers and now at its highest virus alert level. Moreover, and likely directly contributing to AUD downside is the news that Aussie state South Australia will immediately implement a six-day “circuit breaker” lockdown after an outbreak was recently uncovered, serving as a reminder of the risks the pandemic still poses to the country.

AUD/USD eyes further downside towards bottom of recent range

AUD/USD has been unable to rally back to the north of the 0.7280 mark in recent trade, with sellers coming in ahead of a retest of the previous weekly lows around 0.7284. The pair now looks to be conforming to a resistance in the form of a downtrend linking Wednesday and Thursday European morning session highs (see the one hour chart).

If the bears remain in control, a retest of Thursday lows at 0.7255 and then ultimately the 0.7250 level are on the card in the near future, as is, eventually a test of the lower bounds of AUD/USD’s recent trendline, the bottom of which links the 3 November highs and 13 November lows at roughly 0.7220.

AUD/USD one hour chart

AUD/USD one hour chart

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD recaptures 0.7700 amid Risk-on mood, upbeat Aussie data

AUD/USD remains strongly bid above 0.7700 after Monday’s downbeat performance. The aussie benefits from upbeat Australian housing data and risk-on mood. Incoming Treasury Secretary Janet Yellen’s indirect support to Biden’s stimulus favors the risk-takers.

AUD/USD News

EUR/USD:Falling wedge on 4H tests bearish impulse below 1.2100

EUR/USD portrays choppy trading moves between 1.2075 and 1.2080 during Tuesday’s Asian session. Bullish chart pattern, recovering MACD keep buyers hopeful. Early February lows, 61.8% Fibonacci retracement add to the downside filters.

EUR/USD News

Gold: All eyes on the greenback and US yields

Gold prices are attempting to recover as te DXY stalls in its bullish correction. The dollar could still be a catalyst for a deeper positioning squeeze in the yellow metal. The US dollar strengthened for a third consecutive day on Monday.

Gold news

BTC/USD: Its a make or break at 36170

BTC/USD is trending up again in the 30 minutes time frame; the price structure has changed since the weekend selloff with higher highs and higher lows. Prices fell below the crucial point at 36170 in yesterday's session but bounced back.

Read more

US Dollar Index: Immediately to the upside comes 91.00

DXY extends the march north and already trades at shouting distance from the 91.00 barrier, or new 2021 highs.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures