6 August AUDUSD Technical Outlook: Downside to resume


AUDUSD has just spiked on the five-minute charts and is testing 0.74 the figure having broken up through the descending resistance from the 3rd Aug China/US news/data-driven peak at 0.7411. What next can traders expect? Today’s 6 August AUDUSD Technical Outlook reveals.

6 August, GKFX – AUDUSD  broke higher on Friday, fulled by risk-on mode markets following China’s intervention and then by poor US data – this was on the back of the nonfarm payrolls report as well as the services data in the US July ISM Non-Mfg PMI, arriving at 55.7 vs the 58.6 forecast and well below the 59.1 previous.

Subsequently, investors stepped away from the dollar on a deteriorating outlook for the US economy’s Q3.

AUDUSD Fundamental Highlights

A case for a strong dollar – “From an FX perspective, the jobs report should have minimal impact,” – (analysts at TD Securities argue):

Payrolls aldo disappointed in July with a 157k gain on a deceleration in private services and a contraction in government jobs. However, the gain is still well above the breakeven pace (80-120k) and comes on the back of strong net upward revisions totalling +59k.

“Manufacturing and construction held on to solid gains as well. This leaves job growth tracking at a robust pace with 3- to 6-month averages holding above 220k,”

Analysts at TD -Securities explained.

“Even with today’s modestly disappointing headline print, the pace of job growth remains more than enough to continue to reduce the unemployment rate and tighten labor markets, in line with the Fed’s current projections.

While wage growth has not jumped higher despite risks cited in the Beige Book and elsewhere, Fed officials remain confident that inflation should gradually return to, if not somewhat overshoot, its long-run 2% target.

As a result, the Fed should remain comfortable with its current plans to hike gradually over time. We expect the next hike in September, followed by December,”

The analysts at TD Securities argued, and adding, –

“We suspect that an outright capitulation on USD longs will remain absent for now.”

6 August AUDUSD Technical Outlook

The initial resistance for the pair aligns at 0.7400 (daily high/20-DMA) ahead of 0.7440 (Jul. 31 high) and 0.7500 (psychological level). On the downside, supports could be seen at 0.7355 (Aug. 2 low), 0.7315/10 (Jul. 29/Jul. 2 low) and 0.7240 (Dec. 19, 2016 low). 

Disclaimer

This article 6 August AUDUSD Technical Outlook was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.

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