mercredi 1 avril 2015
AUDUSD: Could We See a Pre-NFP Bounce to .7700?
Posted on 09:07 by nice news
While US economic data broadly deteriorated through Q1, the lone bright spot was the labor market. Through the first three months of the year, US Non-Farm Payrolls increased by a whopping 863k jobs, while other measures of economic activity including PMI surveys, retail sales, durable goods orders and inflation readings have all turned lower. After today’s weaker-than-anticipated ADP employment report (189k vs. 227k eyed), traders are starting to worry that the last “leg” of the United States’ economic outperformance “stool” is starting to crack, and the US dollar is trading a tick lower early in today’s North American session.
The near-term dip in the greenback has helped the beleaguered AUDUSD bounce from support at .7600. As my colleague Chris Tedder noted earlier this week, the collapsing price of iron ore, Australia’s number one export, to a new 10-year low has dragged the Aussie lower. Unfortunately for Aussie bulls, iron ore producers are stubbornly refusing to cut production, suggesting that ore prices (and by extension, AUDUSD) may remain under pressure for the foreseeable future.
With that said, AUDUSD could struggle to break below strong support at .7600 in this week’s pre-holiday, low-liquidity trading conditions. Looking to the chart, this level consistently put a floor under AUDUSD throughout March, and the secondary indicators are also suggesting that the tide may be starting to turn in the bulls’ favor. For its part, the MACD indicator has turned higher is about to cross back above its signal line, suggesting that the bearish momentum is starting to wane. Meanwhile, the RSI has also formed a clear bullish divergence in oversold territory at the recent lows, hinting at a short-term bounce.
If we do see a near-term rally emerge in AUDUSD, bulls may look to target the shallow 23.6% and 38.2% Fibonacci retracements at .7665 and .7715, respectively. On the other hand, a conclusive break below
The near-term dip in the greenback has helped the beleaguered AUDUSD bounce from support at .7600. As my colleague Chris Tedder noted earlier this week, the collapsing price of iron ore, Australia’s number one export, to a new 10-year low has dragged the Aussie lower. Unfortunately for Aussie bulls, iron ore producers are stubbornly refusing to cut production, suggesting that ore prices (and by extension, AUDUSD) may remain under pressure for the foreseeable future.
With that said, AUDUSD could struggle to break below strong support at .7600 in this week’s pre-holiday, low-liquidity trading conditions. Looking to the chart, this level consistently put a floor under AUDUSD throughout March, and the secondary indicators are also suggesting that the tide may be starting to turn in the bulls’ favor. For its part, the MACD indicator has turned higher is about to cross back above its signal line, suggesting that the bearish momentum is starting to wane. Meanwhile, the RSI has also formed a clear bullish divergence in oversold territory at the recent lows, hinting at a short-term bounce.
If we do see a near-term rally emerge in AUDUSD, bulls may look to target the shallow 23.6% and 38.2% Fibonacci retracements at .7665 and .7715, respectively. On the other hand, a conclusive break below
AUDUSD: Could We See a Pre-NFP Bounce to .7700?
Categories: AUDUSD: Could We See a Pre-NFP Bounce to .7700?
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