AUD/USD steady above 0.6700 amid mixed US economic signals
- AUD/USD shows marginal gains in volatile session, reacting to US job strength and services sector deceleration.
- Solid US Nonfarm Payrolls and a decline in Services PMI create a mixed economic landscape, impacting currency dynamics.
- Traders eye upcoming US inflation data and Australian Retail Sales for further directional cues in the week ahead.
The AUD/USD is almost flat during the North American session, after mixed economic data from the United States (US) keeps the Greenback seesawing between gains and losses. A solid employment report in the US and weaker business activity in the services sector keep investors scratching their heads about the economy's outlook. The pair, post minuscule gains of 0.11%, trades at 0.6711.
AUD/USD remains afloat above 0.6700 amid mixed US economic data
The Institute for Supply Management (ISM) revealed the services sector slowed in December, as the Services PMI slid from 50.7 to 43.3, the lowest since May 2023. Today’s reading, along with the Manufacturing PMI revealed earlier this week, suggests the economy is slowing faster than foreseen, with both readings in recessionary territory.
Earlier, the US Department of Labor (DoL) disclosed the US economy created 216K jobs, as illustrated by December’s Nonfarm Payrolls data, while the Unemployment Rate cooled from 3.8% to 3.7%. According to Average Hourly Earnings, wages rose to 4.1% YoY from 3.9%.
In the meantime, the AUD/USD reversed its earlier gains post US NFP and ISM Services PMI release, which witnessed the pair hitting a daily high of 0.6748, before retreating somewhat toward the 0.6710 region.
Ahead of the next week, the US economic docket will feature December’s inflation data. On the Australian front, traders would be looking for Retail Sales.
AUD/USD Price Analysis: Technical outlook
After dropping toward 0.6640, AUD/USD buyers moved in, lifting the pair shy of testing the 0.6750 area before reversing its course. If the pair closes around current exchange rates, that would form a large doji, meaning that traders remain uncertain about the pair's direction. For a bullish resumption, buyers must reclaim 0.6750, which would expose the 0.6800 figure. On the downside, if sellers drag prices below the 0.6700 figure, that could pave the way to test the confluence of the 50-200-day moving averages (DMA), at 0.6582/92.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
