AUD/USD drops to multi-month lows below 0.68 as focus shifts to US employment data

• Upbeat retail sales data from Australia fails to help Aussie.
• Concerns over prolonged US-China trade conflict weigh on antipodeans.
• Coming up: Labour market, consumer sentiment, and factory orders  data from US.  

The AUD/USD pair suffered heavy losses on Thursday and closed the 12th straight day in the negative territory as the Aussie came under strong bearish pressure following United States President Donald Trump’s surprise announcement of an additional 10% tariff on $300 billion worth of Chinese goods.

The lack of any fresh developments on that matter makes it difficult for the currency to find demand today and the AUD/USD pair was last seen trading at its lowest level since the flash crash witnessed in early January at 0.6790, erasing 0.13% on the day.

Earlier today, the data published by the  Australian Bureau of Statistics showed that retail sales in June increased by 0.4% on a monthly basis to come in better than the market expectation of 0.3% did little to nothing to help the currency recover its losses. Meanwhile, responding to Trump’s tariff announcement, “the latest US action on trade shows how the US is flip-flopping. China will never give in to blackmail and intimidation,”  China’s Foreign Ministry spokeswoman said.

Focus shifts to US NFP data

In the second half of the day, investors will be paying close attention to the US Bureau of Labor Statistics’ monthly labour market data, which is expected to show the Unemployment Rate remaining unchanged at a historic low of 3.7% and the Nonfarm Payrolls (NFP) rising by 164,000. A  stronger-than-expected reading could help the Greenback gain traction and push the pair lower. On the other hand, a disappointing NFP figure could weigh on the currency as it would ramp up the expectations of the Fed cutting the policy rate one more time in September.

Technical levels to watch for