- AUD/USD was seen consolidating this week’s retracement slide from two-year tops.
- A subdued USD price action extended some support and helped limit the downside.
- The risk-off mood capped any meaningful gains ahead of the US jobs report – NFP.
The AUD/USD pair lacked any firm directional bias on Friday and seesawed between tepid gains/minor near weekly lows, just above mid-0.7200s.
The pair was seen oscillating in a range through the Asian session on Friday and consolidated this week’s pullback of over 150 pips from two-year tops – levels beyond the 0.7400 mark. The US dollar struggled to capitalize on its attempted recovery, instead came under some renewed selling pressure on Thursday despite better-than-expected US Initial Weekly Jobless Claims. This, in turn, was seen as one of the key factors that extended some support and helped limit the downside for the AUD/USD pair.
However, a turnaround in the global risk sentiment – as was evident from the overnight selloff in the US equity markets – benefitted the greenback’s relative safe-haven status against its Australian counterpart. This coupled with a downward revision to Australia’s retails sales figures for July held bulls from placing any fresh bets and kept a lid on any meaningful upside for the AUD/USD pair.
Investors also seemed reluctant, rather preferred to wait on the sidelines ahead of Friday’s release of the closely watched US monthly jobs report. The headline NFP is expected to show that the US economy added 1.4 million jobs in August. The unemployment rate is seen ticking down to 9.8%. The data will influence the USD price dynamics and produce some meaningful trading opportunities.
From a technical perspective, the AUD/USD pair, so far, has managed to hold above the 200-week SMA. This makes it prudent to wait for some strong follow-through selling before confirming that the pair might have topped out in the near-term and positioning for an extension of the corrective slide, possibly below the 0.7200 round-figure mark.
Technical levels to watch
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