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AUD/USD
AUD/USD has recorded considerable losses on Thursday, as the Aussie’s slide continues. In the Asian session, the pair is trading at 0.6788, down 0.53%.
Aussie Dips on Mixed Employment Data
The Australian economy created 34.7 thousand jobs in August, marking a second straight month of strong job growth. Despite the rosy numbers, the unemployment rate rose to 5.3%, up from 5.2% a month earlier. This was the highest jobless rate since last September. An increase in unemployment is another sign that the RBA could lower interest rates in October.
Fed Lowers Rate, Mum on Future Moves
There were no surprises as the Federal Reserve cut the benchmark rate by a 1/4% on Wednesday. Fed Chair Jerome Powell said that domestic economic conditions were “favorable”. The rate statement did not provide any hints with regard to further rate cuts this year. According to the CME Group, there is a 43% of another rate cut in October.
AUD/USD Technical Analysis
On Wednesday, AUD/USD broke below the 50-day moving average support at 0.6849. The pair has tested support at 0.6805 with a strong downward pressure in the Asian session. Below, there is immediate support at 0.6760. On the upside, 0.6839 has strengthened in resistance as the Aussie continues to lose ground.
USD/CNY
USD/CNY remains rangebound on Thursday. In the Asian session, the pair is trading at 7.101, up 0.24%.
Yuan Shrugs as Fed Lowers Rates
There was plenty of hype around the Federal Reserve decision, but in the end, the Fed lowered rates by 25 basis points, as expected. What was perhaps more surprising was a positive message from Fed Chair Jerome Powell, who said that the U.S. economic outlook remained “favorable”. The rate statement did not provide any clues about future rate cuts, but there could be more to come before the end of 2019.
With no major Chinese events for the remainder of the week, U.S. indicators will have a magnified effect on the movement of the Chinese yuan. Traders should keep an eye on the Philly Fed Manufacturing Index and unemployment claims, both of which will be released during the North American session.
USD/CNY Technical Analysis
The Chinese yuan seems content to drift, as it has been unable to mount an attack in either direction. On the upside, USD/CNY 7.1100 is within striking distance, but this line hasn’t been tested since last week. If the pair can break through this resistance line, I would expect a breakout towards 7.1700, which is the next resistance line. On the downside, there is support at 7.0592.