AUD/USD ANALYSIS &TALKING POINTS
- Aussie unable to shake off global risk aversion.
- NFP in focus as we close off the week.
AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The Australian dollar was unable to capitalize on the slightly hawkish Reserve Bank of Australia (RBA) monetary policy statement where tackling inflation by any means necessary was the core message. I think markets focused on the downside risks to the broader global outlook reiterated by the Bank of England (BoE) yesterday leaving the ‘pro-growth’ AUD vulnerable. We can confirm this as most Emerging Market (EM) currencies are down against the greenback today showing investor appetite for risk is low.
This being said, yesterday strong balance of trade figures showed a continued rise via commodity exports while commodity prices themselves are largely elevated across the board. Looking ahead, the Non-Farm Payroll (NFP) release grabs headlines and will give us an indication of the state of the U.S. labor market. I will also be looking at the average hourly earnings to see whether or not inflationary pressure is declining or not.
ECONOMIC CALENDAR
Source: DailyFX economic calendar
TECHNICAL ANALYSIS
AUD/USD DAILY CHART
Chart prepared by Warren Venketas, IG
AUD/USD price action reflects the risk-off sentiment with the Aussie in the red ahead of the NFP print.
Key resistance levels:
- 100-day EMA (yellow)
- 0.7000
Key support levels:
- 50-day EMA (blue)
- 20-day EMA (purple)
- 0.6824 (23.6% Fibonacci)
IG CLIENT SENTIMENT DATA: BULLISH
IGCS shows retail traders are currently LONG on AUD/USD, with 54% of traders currently holding long positions. At DailyFX we typically take a contrarian view to crowd sentiment however, recent changes in long and short positioning results in a short-term upside bias.
| Change in | Longs | Shorts | OI |
| Daily | -6% | -2% | -5% |
| Weekly | -24% | 45% | -9% |
Contact and follow Warren on Twitter: @WVenketas
