The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Monday, dragging the price of AUDUSD to less than even 0.6925 following the release of US employment data last week. The technical bias remains bearish due to a Lower Low and Lower High on every timeframe.
Technical Analysis
As of this writing, the pair is being traded around 0.6921. A support may be noted near 0.6854, multi-year low ahead of 0.6800, the psychological number and then 0.6007, the swing low of the last major dip as demonstrated in the following monthly chart.
On the upside, the pair is expected to face a hurdle near 0.7020, the swing high of Friday ahead of 0.7204, the 76.4% fib level and then 0.7500, the psychological number. The technical bias will remain bearish as long as the 0.7438 resistance area is intact.
Fed Rate Hike
NFP disappoints with a print of 173K jobs added to American Non-Farm Payrolls: This was a rather outsized miss as the expectation was for 217k jobs to have been added. This brings on relevance in the fact that it’s the last NFP report before we get to the September 16-17 FOMC decision on rate hikes. Unemployment came in at 5.1%, which sounds good… but with Labor Force Participation at 62.6%, the lowest read since latter 1977. So this 5.1% unemployment rate isn’t nearly as attractive as it may first appear. With strong employment being cited as a primary reason for the Fed looking to raise rates, this weak print may have just made that case ‘less strong.’
Trade Idea
Considering the oversold outlook of the pair, buying around the current levels could be a good strategy if we get a solid reversal candle such as bullish pin bar or bullish engulfing candle.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
