Today, we got disappointing US Non-Farm Payroll data. The US economy added 142K jobs in August after adding 212K jobs in July. This was way below the average forecast of 226K, and even below the range of forecasts from Bloomberg between 190K and 310K.
Amid an environment of USD-strength, today’s data should allow the market to consolidate.
The AUD/USD has already been consolidating throughout August, ranging roughly between 0.9235 and 0.9374. This week, the RBA met and held the official cash rate at 2.50%.
In addressing the prospect of a rate cut, RBA governor Glenn Stevens warned that “further inflating an already elevated level of housing prices seems an unwise route”. The assessment of the economy was balanced and maybe slightly hawkish, as the statement noted some pick up in business conditions and credit, though the bank is cautious on everything else.
It does not seem like the bank is preparing for any rate hikes, but it is definitely sounds like it wanted to move away from its loose monetary policy campaign.
Now, couple a neutral, perhaps slightly hawkish RBA statment with the disappointing NFP, and we have the recipe for at least some short-term bullish attempt, and that is what we are seeing from the AUD/USD during this Friday session.
(click to enlarge)
We can see in the 4H Chart, we see that price has broken above the 200-, 100-, and 50-period simple moving averages (SMAs), and the 4H RSI is pushign above 60, showing loss of bearish momentum.
More importantly, price is moving above the 0.9375 high on the week, after holding above the cluster of SMAs as support. This shows a strong bullish intent, though we need to see a clearer breakout than at the moment to call this a price bottom. I would say its about 80% there. A push of the 4H RSI above 70 would also help build the case for a bullish outlook up from the August price range.
In this bullish scenario, there will be upside risk back toward the 0.9505 high on the year. A brak below 0.9320 however would keep AUD/USD in consolidation mode, with a short-term bearish outlook.
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