- AUD/USD struggles to make a decisive recovery on Monday.
- US Dollar Index stays in range above the 95 mark.
The AUD/USD pair is struggling to set its next short-term direction as it fluctuates in a relatively tight range above 0.71. As of writing, the pair was trading at 0.7117, adding 0.17% on the day.
A subdued trading action in the FX markets seems on Monday seems to be the primary reason why the pair is moving sideways. The US Dollar Index, which finished the week on a strong note on the back of upbeat employment numbers from the U.S., was last seen flat on the day at 95.32. Commenting on the nonfarm payroll report, “strong hiring and strengthening wage gains should keep the Fed on track to raise rates not only at its meeting later this month, but also again in December,” Wells Fargo analysts said.
In fact, according to the CME Group FedWatch Tool, markets are now pricing a 75% probability of one more rate hike in December after September, compared to around 66% a week ago.
Later in the day, the only significant data featured in the U.S. economic docket will be the Fed’s consumer credit report. Meanwhile, investors will continue to look for headlines on the U.S. – China trade conflict.
Technical levels to consider
The initial resistance for the pair could be seen at 0.7190 (Sep. 7 high) ahead of 0.7250 (20-DMA) and 0.7320 (50-DMA). On the downside, supports align at 0.7100 (daily low/Sep. 7 low), 0.7060 (Feb. 12, 2016, low) and 0.7000 (psychological level).
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