AUD/USD on thin ice ahead of key events

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 31, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    AUD/USD remains better bid on a mixed day for the greenback with quarter-end flows and squaring up. Still, the under tone remains mixed/bullish for the Aussie ahead of today's data from China, tomorrow's nonfarm payrolls and next week's RBA.

    The fact of the matter is that all the strength in the Aussie isn't totally derived from domicile economic factors, but more to do with the market's risk appetite returning and a sell-off in the greenback since Yellen's dovish tone in her recent speech delivered in New York.

    What needs to now be considered is the level that the Aussie has now reached. This will be a major concern to the RBA and will likely be a topic next week that could cut ideas of a continuation to the upside very short while the markets continue to react in a knee jerk to every bit of noise in such uncertainty, be it just daily street chatter, transitory data performances or something as prominent and final as a Central Bank's statement. However, still, Yellen's recent tone has drawn a line in the sand and until we hear from the FOMC again, positive US data may not be enough to tame dollar bears.

    Get set for China's March PMIs - TDS

    First up for today's session, we have the first set of key data from China for some time with the Chinese PMI's for March. This will draw on traders attention ahead of the nonfarm payrolls showdown in the US session.

    AUD/USD levels

    AUD/USD has yet to convince the market on the 0.77 handle. A close above 0.7680 on a daily basis should give life to the bulls to then target 0.7850 (38.2% retracement of move down from 2014) before achieving a critical level as 0.8030/50.

    On the other hand, with the amount of risk ahead, the bullish undertone could be wiped out entirely on a set of poor data from China or exceedingly strong jobs data from the US. Aussie bulls are treading on thin ice around the 0.7650 level that was a resistance earlier in week on two occasions. This level was broken overnight until demand at 0.7634. However, a break below US session lows opens 0.7510 as the next key target below the 200 sma on the 1hr time frame at 0.7578.
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