AUD/USD falls to a low of 0.7169 on the day
Price is beginning to track lower again after having broken back below the 100-hour MA (red line) @ 0.7192 earlier today. There is some swing region support around 0.7165-70 but ultimately this is all part of the daily support region where the pair has been testing throughout the week:
Softer risk sentiment in markets along with domestic issues – despite positive data – this week has been a real drag for the aussie. Markets are waiting with abated breath for the next development in the trade rhetoric between US and China and that continues to put a dent on risk sentiment, which doesn’t bode well for the aussie.
Up ahead, there is also risk to come from the US non-farm payrolls later in the day and barring any capitulation in the labour market the data should reaffirm the Fed’s commitment to hike rates at the end of the month. But the risk for me is to keep an eye on wages, that’s a signal for “good” or “bad” inflationary pressures in the US economy.
Right now, 0.7145 will be the key defining support level in AUD/USD. If the daily level breaks below that, it opens up the next wave to the downside possibly towards 0.7000 at least.