AUDUSD is still stuck inside its range visible on the 4-hour time frame, still deciding whether to test support or to head back to resistance. A move towards the top of the range around the .7900 major psychological level could be followed by a selloff back towards the bottom.
The 100 SMA is below the 200 SMA, suggesting that the previous selloff could resume and that the path of least resistance is to the downside. However, another test of the range support could spur a bounce since this floor has held strongly in the past tests.
Stochastic is already indicating oversold conditions, which suggests that sellers are already tired and that buyers are ready to push the price back up. RSI is on the move down, suggesting that there could be enough selling pressure to trigger a test of support at the .7600 major psychological level.
AUDUSD Fundamental Factors
Earlier today, Australia printed a weaker than expected trade balance and a downward revision in the previous report, reflecting a downturn in export activity. This could mean more losses for the Australian dollar if the slump in trade eventually convinces the RBA to cut interest rates.
Later on, the US will release its NFP report and possibly show a 230K increase in hiring. This would be slightly weaker compared to the previous 280K gain but still enough to bring the jobless rate down from 5.5% to 5.4%. In addition, average hourly earnings are expected to show a 0.2% uptick but an upside surprise is likely given the Obama administration’s move to increase overtime pay.
In the next Asian trading session, Australia will release its retail sales report. Analysts are expecting to see a 0.5% uptick, following the previous flat reading. Hiring was weaker than expected in May, supporting the possibility of a downside surprise. In that case, AUDUSD could have enough selling momentum for a break below support.
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