AUD/USD: Depressed near one-week low under 0.7300, Aussie Retail Sales, US NFP eyed
- AUD/USD sellers attack lower end of the recent 0.7265-82 trading range after flashing three-day losing streak.
- US Dollar Index staged three-day run-up despite mixed data.
- Wall Street portrayed the sea of red with Nasdaq down 5.0%, S&P 500 off 3.5%.
- Risk catalysts, Australia’s final version of July Retail Sales can entertain traders during the pre-NFP trading lull.
AUD/USD remains on the back foot after posting the biggest losses in a month. The aussie pair begins the key trading day, comprising the US employment data, while keeping the recent 0.7265-82 range, currently around 0.7275, at the start of Friday’s Asian session. The pair’s declines are mostly attributed to the US dollar’s sustained pullback from the multi-month low, followed by a slump in the Wall Street benchmarks. Also weighing the quote could be worried concerning the US stimulus and escalating Sino-American tension.
Is it still a pullback?
After loosing +140 pips so far during September, AUD/USD questions the bulls to reassess their bets. Though, the previous five-month rally from the sub-0.6000 area terms the recent declines as a mere consolidation than anything else.
Even so, market players need to be cautious as the US Dollar Index (DXY) probes a three-week-old resistance line following its U-turn from a 28-month low. The greenback gauge respects the market’s rush to risk-safety amid uncertainty over the American stimulus and escalating US-China tension. Also favoring the US currency could be the Fed policymakers’ clears view of keeping the monetary policy easy and without doubt, unlike others on the line that still lack directions.
It’s worth mentioning that the US Jobless Claims and the activity numbers were also less harmful on Thursday. The same reversed fears of a heavy disappointment from today’s Nonfarm Payrolls (NFP) after Wednesday’s ADP data slipped below marked consensus of 950K to 428K.
Elsewhere, China’s Global Times (GT) recently threatened the US to cut its American debt holdings after the Trump administration announced extra hardships for Beijing diplomats. One should know that China is the world’s second-largest holder of US debt.
Against this backdrop, Wall Street benchmarks witness the sea of red led by the Nasdaq’s 5.0% losses and 1.5 basis points of the US 10-year Treasury yields.
Read: Wall Street Close: Tech rout takes S&P and Dow into a tailspin
Moving on, traders may get intermediate clues from July month’s final reading of Retail Sales, expected 3.3% initially, as well as the key risk catalysts like the coronavirus (COVID-19) updates, US stimulus news and the US-China tensions. However, a lack of liquidity can be witnessed during the generally following pre-NFP trading lull.
Read: Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise
Technical analysis
Having slipped below an ascending trend line from July 31, the pair trades near the late-August top with the 21-day EMA level, around 0.7240, acting as immediate support. However, the buyers may remain hopeful unless the quote slips below an upward sloping support line from July 14, at 0.7210.