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The Australian Dollar is trading lower shortly before the U.S. opening and the release of the U.S. Non-Farm Payrolls report at 1230 GMT.
At 0856 GMT, the AUD/USD is trading .7358, down 0.0050 or -0.07%.
Long-term, the Aussie is being pressured by Wednesday’s hawkish U.S. Federal Reserve monetary policy statement which widens the divergence with the dovish Reserve Bank of Australia. The Fed plans to raise rates at least two more times in 2018 and perhaps as many as three times in 2019, while the RBA is not expected to begin raising its benchmark interest rate until late 2019 to early 2020.
Short-term, the dollar is being driven higher by safe-haven buying tied to the escalation in trade tensions between the United States and China.
Later today at 1230 GMT, the U.S. will release its latest Non-Farm Payrolls report. The Non-Farm Employment Change is expected to show an increase of 190K. The unemployment rate is expected to decline to 3.9% and Average Hourly Earnings are expected to come in at 0.3%, up from 0.2%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .7318 will change the main trend to down. A move through .7465 will signal a resumption of the uptrend.
The minor trend is down. The minor trend turned down on Thursday when sellers took out .7370. This also shifted momentum to the downside. The minor trend will change to up on a trade through .7442.
The main range is .7310 to .7484. Its 50% level or pivot is .7397. The intermediate range is .7318 to .7465. Its 50% level or pivot is .7392. The short-term range is .7465 to .7348. Its retracement zone is .7407 to .7420.
Trading on the weak side of these retracement levels is also helping to give the EUR/USD its downside bias. All of these levels are new resistance.
Daily Swing Chart Technical Forecast
Today’s session begins with the AUD/USD down seven sessions form its last main top at .7465. Therefore, it is in the window of time for a closing price reversal bottom. Based on this assessment, the direction of the Forex pair the rest of the session will be determined by trader reaction to yesterday’s close at .7364.
A sustained move under .7364 will indicate the presence of sellers. If this generates enough downside pressure then look for a move through today’s intraday low at .7348. This could trigger an acceleration to the downside with .7318 the next major downside target.
A sustained move over .7364 will signal the presence of buyers. This will indicate the selling is getting weaker and the short-covering is getting stronger. If this creates enough upside momentum then look for the rally to perhaps extend into the pivot cluster at .7392 to .7397.