- Disappointment from early employment signals weighs on the AUD/USD pair.
- The US-China trade developments are positive so far.
- Speech from the RBA’s Lowe and the US Durable Goods Orders will be followed for fresh impulse.
Following its drop to be the worst G10 performer, the AUD/USD pair remains modestly flat around 0.6980 during the early Asian session on Thursday.
The Australian Dollar (AUD) declined heavily on Wednesday after the forward-looking employment indicators flashed red signals. The employment component of the CBA/Markit Purchasing Managers’ Index (PMI) and Skilled Vacancies for June both increased the odds of the Reserve Bank of Australia’s (RBA) bearish bias.
With this, the Aussie failed to portray the US Dollar (USD) pullback after housing and PMI data flashed mixed signals.
Market sentiment remained mostly downbeat with the US 10-year treasury yield marking 2.05% by the press time. It should also be noted that risk tone further heavies as North Korea tested two projectiles from Wonsan that landed into the Sea of Japan, as per the Sky News.
Elsewhere, the US-China trade negotiations are positive so far ahead of the next week’s face-to-face meeting in Beijing.
Looking forward, speech form the RBA’s Governor Philip Lowe will be the key catalyst for the Aussie traders seeking clues for future monetary policy actions. RBA’s Lowe is set to speak to the Anika Foundation Lunch on Inflation Targeting and Economic Welfare. At the US, June month Durable Goods Orders will be in the spotlight.
Technical Analysis
A five-week-old ascending trend-line at 0.6963 becomes the key support for the pair as of now, a break of which can exert fresh selling pressure towards monthly low close to 0.6910. Meanwhile, 21-day exponential moving average (EMA) level near 0.7000 may limit the pair’s immediate upside ahead of highlighting 0.7040 and 0.7085 numbers to the north.
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