- AUD/USD witnessed some heavy selling following the release of dismal employment details.
- The downbeat market mood benefitted the safe-haven USD and added to the selling bias.
- Technical selling below mid-0.7100s further aggravated the intraday bearish pressure.
The AUD/USD pair added to its intraday losses and dropped to over one-week lows, around the 0.7100 mark during the early European session.
Following the previous day’s two-way price moves, the pair witnessed some heavy selling on Thursday and retreated further from three-week tops set last week. The Australian dollar was weighed down by the disappointing release of employment details, showing that the economy lost 29.5K jobs in September. Adding to this, the Unemployment Rate ticked higher to 6.9% from 6.8% and strengthened the case for an immediate interest rate cut by the RBA in November.
Apart from this, a fresh leg down in the US equity futures extended some support to the US dollar’s relative safe-haven status and exerted some additional pressure on the perceived riskier aussie. The global risk sentiment took a hit in the wake of fading hopes of additional US fiscal stimulus. It is worth reporting that the US Treasury Secretary Steven Mnuchin said on Wednesday that he and House of Representative Speaker Nancy Pelosi remain “far apart” on spending priorities.
This comes on the back of a setback in the development of a vaccine for the highly contagious coronavirus disease and concerns about the second wave of infections, which, in turn, benefitted traditional safe-haven assets.
Apart from this, possibilities of some short-term trading stops being triggered below mid-0.7100s further contributed to the AUD/USD pair’s steep intraday slide. Bearish traders might now be looking to build on the momentum further below the 0.7100 round-figure mark, possibly towards testing the next major support near the 0.7025 region.
Technical levels to watch
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