The Australian Dollar is edging lower against the U.S. Dollar on Friday as traders positioned themselves ahead of the U.S. Nonfarm Payrolls report, due to be released at 13:30 GMT. At 08:04 GMT, the AUD/USD is trading 0.7062, down 0.0015 or -0.22%.
The U.S. Labor Department’s closely watched employment report is expected to show that nonfarm payrolls increased by 185,000 last month after rising by 223,000 in December, according to a Reuters survey of economists.
Average hourly earnings have forecast rising 0.3% after a similar gain in December. That would lower the year-on-year increase in wages to 4.3% from 4.6% in December. The unemployment rate is expected to tick up to 3.6% from a more than 50-year low of 3.5% in December.
Coming in at this figure would allow the Fed, focused on wage inflation, to maintain a moderate pace of rate hikes and reduce the risk of a recession this year. A weaker-than-expected report will support the case for the Fed’s early exit from its rate-hiking campaign in March.
This would be potentially supportive of the AUDUSD. Strong data, especially average wage growth, could greenlight more rate hikes from the Fed after March and a terminal rate above 5%. The main trend is up according to the daily swing chart. However, momentum is trending lower following the confirmation of Thursday’s closing price reversal top.
A trade through .7158 will negate the potentially bearish chart pattern and signal a resumption of the uptrend. A move through .6984 will change the main trend to down. The minor range is .6984 to .7158.
The AUD/USD is currently trading on the weak side of its pivot at .7071, making it resistant. The nearest support is a 50% level at .7009. The closest resistance is the price cluster at .7137 to .7158.
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