AUD/USD traders await the RBA this week and prospects of an upside correction

• AUD/USD  starting out quiet for the week, with eye son the RBA.
• Valeria Bednarik, Chief Analyst at FXStreet notes the  risk of an upward corrective movement.  

AUD/USD is quiet at the start of the week, consolidating the recent downside price action ahead of the Reserve Bank of Australia as the main event ahead. On Friday, the US non-farm payrolls came in at 164k in July, just 1k shy of consensus expectations, down from the June number.    Payrolls were also revised down from 224k to 193k. Average hourly earnings came in unchanged from the previous month, at 0.3% m/m, and rose to 3.2% y/y (from 3.1% in June). In other detail, the unemployment rate was unchanged at 3.7%. In detail, job gains were broad-based across sectors and trade-sensitive industries saw payrolls rise. A plus came in the manufacturing payrolls which were up 16k (from 12k in June).

On the trade front which is garnering more attention since the latest escalations in trade wars, the data saw the US trade deficit largely unchanged from the month prior, coming in at USD55.2bn (from USD55.3bn in May). The deficit with China in the first six months of this year fell 10.1% to USD167bn (from USD187bn a year ago). US June factory orders were also largely in line with expectations, coming in at 0.6% m/m.

All eyes on  RBA

AUD/USD was pretty much confined to below the 0.68 handle on all of the news following the volatility in the week, but things ahead look to be busy as well with the RBA holding its    August policy meeting  this week. Analysts at ANZ bank explained that they no longer expect the RBA to cut on Tuesday, but said  the RBA  looks set to ease monetary policy further in coming months if it’s to be successful at driving the unemployment rate down towards 4.5%.  

AUD/USD  levels

Valeria Bednarik, the Chief analyst at FXStreet explained that the AUD/USD pair is bearish:

“A  risk of an upward corrective movement continues to increase, as the pair declined for an eleventh consecutive day. In the daily chart, technical indicators have decelerated in oversold territory, not yet suggesting a possible bottom underway. Meanwhile, the price develops far below its moving averages, all of them with downward slopes. Shorter-term, and according to the 4 hours chart, the pair seems poised to resume its decline, as a firmly bearish 20 SMA continues capping advances, currently offering a dynamic resistance at around 0.6840. Technical indicators corrected extreme oversold readings but quickly lost directional strength, now flat well into negative ground.”