- AUD/USD plunges despite better-than-expected jobs data.
- Aussie remains dominated by a stronger dollar amid Fed’s tapering talks.
- Delta variant has been at its worse in Australia, providing no breather to the Aussie.
The AUD/USD daily forecast suggests a bearish continuation that cracked the 0.7200 level. The weakness stems from the hawkish Fed’s meeting minutes.
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In the wake of the better-than-expected jobs report, the Australian dollar found some support. Markets were expecting Australia’s unemployment rate to rise to 5% from 4.6% earlier this year. However, the AUD/USD pair failed to prevail due to the dollar’s growth dominating markets.
Australia’s weak economy, disappointing building permits, and pressure from retail sales are the reasons behind the high unemployment rate today. Although the CPI heading is above RBA’s target range, a truncated average of CPI is shown at the bottom. While the magnitude of Delta’s victory is uncertain, the central bank will be given time to pursue its free policy.
The RBA noted in its most recent meeting minutes that the Delta variant will impact the September quarter. It is possible that the July data did not include all the effects of lockdown.
Fed meeting minutes
In its July meeting minutes, the Federal Reserve raised expectations for the fourth quarter this year while reinforcing the recent trend of the US dollar rising against its major counterparts.
COVID fears in Australia
Bloomberg reports that 681 new cases have been reported in New South Wales, New South Wales, during the Delta outbreak in Australia. This is Melbourne’s sixth isolation since the pandemic began.
Coupled with vivid tremors, a robust dollar will continue to confound Australian dollar buyers as they prepare to test their resilience ahead of weekly US jobless claims.
AUD/USD technical forecast: Upthrust bar pointing at losses
The AUD/USD price remains strongly dominated by the bears. The 4-hour chart shows a hidden upthrust bar followed by an upthrust bar with a high volume. The price posted losses of 35 pips after it. The pair have done 88% of its average daily range in the Asian session. It indicates that we can see a rebound in the European session, provided we see a retracement in the US dollar.
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The price is far below the key moving averages. The volume data provides no breather, too, while the 0.7250 level will now act as a strong resistance.
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Saqib Iqbal
