Search ForexCrunch
  • AUD/USD struggled to capitalize on upbeat aussie jobs report-led intraday positive move.
  • The USD added to the post-FOMC strong gains and prompted fresh selling around the pair.
  • Technical selling below the 0.7600 mark further contributed to the steep intraday decline.

The AUD/USD pair continued losing ground through the early North American session and dived to the lowest level since early April, around the 0.7560  region in the last hour.

The pair witnessed a dramatic turnaround on Thursday and fell nearly 80 pips from the intraday swing highs, around the 0.7645 region touched in reaction to the blowout Australian jobs report. The sharp fall for the third consecutive day was sponsored by strong follow-through US dollar buying interest.

The Fed surprised markets with a hawkish turn and signalled that it might raise interest rates at a much faster pace than anticipated previously. The so-called dot plot pointed to two hikes by the end of 2023 and triggered a massive rally in the USD, pushing it to the highest level since April 13.

The USD bulls seemed rather unaffected by a modest pullback in the US Treasury bond yields and largely shrugged off disappointing US macro data. The number of Americans claiming unemployment-related benefits jumped to 412K, while the Philly Fed Manufacturing fell more than expected to 30.7 in June.

The negative factor, to some extent, was offset by a generally softer risk tone – as depicted by a modest pullback in the global equity markets. This was seen as another factor that benefitted the greenback’s relative safe-haven status and drove flows away from the perceived riskier aussie.

Meanwhile, Thursday’s downfall could further be attributed to some aggressive technical selling below the 0.7600 round-figure mark. The AUD/USD pair has now dropped closer to the very important 200-day SMA support, which if broken decisively should pave the way for a further near-term depreciating move.

Technical levels to watch