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AUD/USD recovery losing momentum at 0.73 handle

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 3, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - AUD/USD will open the New Year within the vicinity of the 0.73 handle ahead of key data events, including FOMC minutes mid week and Nonfarm Payrolls at the end of the week.

    "The trend in the US jobs data has been so consistent - just over 200k jobs per month, steadily falling unemployment rate and steady wage growth - that I expect it to continue to now. And therein lies the first pillar of a strong dollar view, however consensual. I can't see a way round the tightening US labour market and steady growth delivering more monetary divergence, enough to keep the dollar strongish." - explained Kit Juckes, economist at Societe Generale.

    While much of the focus might be on the US dollar, commodities will also be of concern, with oil lower again. However, first up is the Chinese data. Today brings the Caixin manufacturing PMI for Dec against the back-drop of NBS manufacturing beating previous, but still below 50 at 49.7 vs 49.6 prior. Non-manufacturing PMI for the same month arrived 54.4 vs 53.6.

    Technically, Valeria Bednarik, chief analyst at FXStreet explained, "The AUD/USD daily chart shows that the price is above a flat 20 SMA, but that the Momentum indicator has turned south and is about to cross the 100 level towards the downside, while the RSI indicator lacks directional strength above its mid-line, all of which limits the upside.

    In the 4 hours chart, the price is stuck around a mild bullish 20 SMA while the technical indicators aim lower around their mid-lines, supporting some limited downward corrective move towards the key 0.7240 support that, if broken, will result in further declines during this Monday."
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