• Disappointing Australian employment details prompts some fresh selling.
• Weaker Chinese macro data/copper prices add to the downward pressure.
• The post-FOMC USD retracement slide might help limit further downside.
The AUD/USD pair held on to its disappointing Australian/Chinese data-led weakness and has now moved within striking distance of the post-FOMC swing lows.
After yesterday's volatile price-action, the pair came under some renewed selling pressure on Thursday after the Australian Bureau of Statistics (ABS) reported that the economy added 12K jobs in May, falling short of consensus estimates pointing to a reading of 19K.
Adding to this, full-time jobs fell by 20.6K as against a rise of 32.7K seen in April and largely offset a downtick in the unemployment rate, which coupled with a big miss on the Chinese retail sales and fixed asset investment data exerted some additional downward pressure on the China-proxy Australian Dollar.
Meanwhile, the ongoing US Dollar retracement slide, despite Wednesday's hawkish Fed rate hike, did little to lend any support. As was widely expected, the Fed raised funds rate by 25 bps and the so-called “dot-plot” showed two additional rate increases in 2018. The greenback, however, failed to stick on the euphoric gains and might now help limit further downside, at least for the time being.
Moving ahead, today's US economic docket, highlighting the release of monthly retail sales data, will now be looked upon for some fresh impetus later during the North-American session. Market participants anticipate retail sales to tick higher to 0.4% in May and core figures are also seen rising to 0.5% m/m.
Technical levels to watch
The 0.7530-25 area might continue to protect the immediate downside, below which the pair could head towards challenging the key 0.75 psychological mark. On the flip side, the 0.7575-80 region now seems to have emerged as an immediate hurdle, which if cleared could lift the pair beyond the 0.7600 handle back towards testing the 0.7625-30 supply zone.
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