Aussie Punches Past 74, NFP Looms


The Australian dollar rally has continued on Friday, as the currency is higher for a fourth straight day. Currently, is trading at 0.7430, up 0.43% on the day.

The continues to falter, and the Aussie has taken full advantage. AUD/USD has gained 1.66% this week, after sharp gains of 2.42% a week earlier. Investors have given the Australian dollar a thumbs-up and soft Australian data on Friday hasn’t put a dent in the currency’s upward movement.

Australia Retail Sales slide

Australia faltered badly in July, with a reading of -2.7%. The economy has been hit by the double blow of soft domestic activity and weak global demand, and there are concerns that the economy could slip into a recession. This could depend on how quickly Australia is able to contain the current wave of Covid, which has led to extensive lockdowns. Although the Covid numbers have been relatively low, the government has not hesitated to impose lockdowns, as most of the population has not been fully vaccinated.

See also  GBP/USD Trades Stuck Between Two Lines

It has been a rough week for the US dollar and the currency markets appear ready for a further dollar sell-off today. However, such a move is contingent on a soft reading from today’s report. The consensus is around 750 thousand new jobs, and if the release is higher than expected, we could see a short squeeze on the US dollar. If the reading surprises to the downside, it could be a rough day for the greenback.

The upcoming NFP is critical as the Fed could decide on the timing of a taper based on the reading. The Fed has tied a taper to stronger employment data, and a better-than-expected read could renew speculation about an imminent taper. Conversely, a weak NFP reading will likely delay Fed plans to taper.

See also  Trading Support and Resistance

AUD/USD Technical

AUD/USD Daily Chart
  • There are resistance lines at 0.7455 and 0.7572
  • 0.7377 has switched to a support role as the AUD rally continues. Below, there is support at 0.7250

Original Post

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

See also  Sellers Dominate After NFP, Aiming 108.50

Read more here