- Upbeat employment report from the U.S. boosts the greenback.
- US Dollar Index continues to march north toward mid-95s.
- Latest China – U.S. trade headlines weigh on the AUD.
The AUD/USD pair extended its losses in the NA session and touched its lowest level since February of 2016 at 0.7102. As of writing, the pair was trading at 0.7110, losing 1.2% on the day.
The pair’s uninterrupted fall on Friday seems to be caused by a combination of a broadly stronger greenback and a weakening AUD. The U.S. Bureau of Labor Statistics on Friday reported that the total number of nonfarm payrolls increased by 201K in August to surpass the market consensus of 191K. Moreover, the annual wage inflation measured by the average hourly earnings rose 2.9% in August to reassure markets that the Fed would stay on track to raise rates twice more this year. The US Dollar Index, which tested the 95 mark earlier in the day, gained traction and turned positive on the week. At the moment, the index is up 0.4% on the day at 95.40.
On the other hand, US President Trump recently told reporters that they were ready to impose new tariffs on $267 billion worth of Chinese goods in addition to the planned $200 billion. Amid Australia’s close economic ties with China, the AUD started to weaken against rival currencies. Against the JPY and the euro, the AUD is down 1% and 0.7% respectively.
There won’t be any other macroeconomic data releases in the remainder of the day, and the pair is likely to record its lowest weekly close in more than two years.
Technical levels to consider
With a decisive break below 0.7100 (psychological level/daily low), the pair could extend its losses toward 0.7060 (Feb. 12, 2016, low) and 0.7000 (psychological level). On the upside, resistances are located at 0.7190 (daily high), 0.7265 (20-DMA) and 0.7335 (50-DMA).
Share
