- Recently sluggish data from the US keep traders nervous ahead of the key employment report.
- Holidays at China and absence of data at home could hinder pair’s trading.
Although thin economic calendar at home and holiday at China restrict AUD/USD moves, buyers are still cheering on the greenback weakness as the Aussie pair is taking the rounds near 0.6980 at the initial Asian session on Friday.
The US Dollar (USD) restored its downward trajectory on Thursday after sluggish data at home kept fearing greenback buyers of the Fed rate cut.
The US-China tussle took a back seat as the market focused on the White House talks to avoid the US tariffs on Mexico. As of now, the US officials are firm on levying 5% duties on Mexican products from Monday to convey their resentment for illegal immigration.
Recently, May month reading of Australia’s AiG performance of construction index slipped beneath 42.6 prior to a nearly six-year low of 40.4. Further, Aussie buyers also ignored the latest news from the Reserve Bank of Australia (RBA) that signals the central bank can suggest banks to increase their holdings of high quality liquid assets (HQLA) from 25 to 30% of the stock of HQLA securities.
Given the absence of major data/events from home and dragon boat festival in China, investors may now look forward to the US job report for May. The headline nonfarm payrolls (NFP) could decline to 185K from 263K but no change is expected in a 3.6% unemployment rate and yearly average hourly earnings of 3.2%.
Technical Analysis
In addition to a successful break of 0.7000, 50-day simple moving average (SMA) level near 0.7020 also becomes necessary for buyers to aim for 0.7070 marks, including 100-day SMA.
Alternatively, 0.6930 and 0.6860 can keep holding the pair’s downside limited, which if broken could drag the quote down towards January 2016 low near 0.6830/25.
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