- Easing in US-China trade tensions put a bid under the AUD yesterday, helping it chart a short-term bull doji reversal.
- A better-than-expected Aussie labor market data could allow a stronger rally to an immediate resistance of 0.7202 (Aug. 15 low).
The AUD/USD pair jumped 90 pips on Wednesday as easing of US-China trade tensions stabilized the risk sentiment and could be in for a stronger corrective rally if the Aussie labor market data better estimates.
The risk assets picked up a bid yesterday after Trump Administration sent an invitation to China to begin a new round of trade talks. The battered Aussie dollar jumped higher, validating Tuesday’s doji candle.
Notably, the bullish doji reversal indicates the pair has made a temporary low at 0.7085 (Sep. 11 low) and could jump above 0.7202 (Aug. 15 low) if the Australia labor market prints above estimates. However, the corrective rally may fall apart if the data disappoints expectations, strengthening calls for a dovish turn by Reserve Bank of Australia (RBA).
The data scheduled for release at 01:30 is expected to show an addition of 18,000 jobs in August, following a loss of 3,900 jobs in July. Meanwhile, the jobless rate is expected to remain unchanged at 5.3 percent.
AUD/USD Technical Levels
Resistance: 0.7202 (Aug. 15 low), 0.7238 (Aug. 24 low), 0.7256 (61.8% Fib R of 0.7362/0.7085)
Support: 0.7163 (10-day moving average), 0.7144 (Sep. 5 low), 0.7134 (5-day moving average)
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