AUDUSD dribbles around mid-0.6700s ahead of Australia employment data
|- AUDUSD remains pressured after reversing from a two-month high.
- Downbeat sentiment, fears emanating from China keep sellers hopeful.
- Jobs report will be the key as upbeat Aussie Wage Price Index challenged RBA doves.
AUDUSD holds onto the previous day’s pullback from the highest levels in three months as traders await Australia’s monthly employment data early Thursday in Asia. The Aussie pair remains pressured around 0.6730 by the press time.
The market’s risk-off mood triggered the AUDUSD pair’s U-turn from the multi-day high on Wednesday. In doing so, the Aussie pair failed to cheer a three-year high print of Australia’s Wage Price Index for the third quarter (Q3), to 3.1% YoY versus 3.0% expected and 2.6% prior.
The chatters surrounding rocket fires in Poland and China Covid woes joined upbeat US Retail Sales data to weigh on the sentiment.
The news that Russian-made rockets were fired at Poland and killed two people initially soured sentiment. The same triggered emergency meetings of the North Atlantic Treaty Organization (NATO) and the Group of Seven (G7), which in turn favored the US Dollar (USD) due to its safe-haven appeal. However, the updates shared by the Associated Press (AP) quoted an anonymous US official’s findings while mentioning that the missile may have been fired by Ukraine, which allowed Moscow to criticize Kyiv for the same and worsen the mood.
Elsewhere, China’s Coronavirus numbers reached the highest levels since April 2021 and raised fears of more lockdowns in the world’s most significant industrial player and Australia’s key customer.
Moving on, US Retail Sales growth rose by 1.3% MoM in October versus 1.0% expected and 0.0% prior. The details suggest that the Retail Sales ex Autos also grew 1.3% MoM compared to 0.4% market consensus and 0.1% previous readings. Further, US Industrial Production contracted by 0.1% in October versus 0.2% forecast and 0.1% prior (revised from 0.4%).
It’s worth noting that the US Federal Reserve (Fed) officials didn’t praise the strong Retail Sales data and kept suggesting a softer rate hike in their latest public speeches, which kept Wall Street in the red but weighed on the US 10-year Treasury yields.
Alternatively, strong numbers of Australia’s Q3 Wage Price Index challenged the bearish bias surrounding the Reserve Bank of Australia (RBA). However, it all depends upon today’s Employment Change, expected 15K versus 0.9K prior, as well as the Unemployment Rate that is likely to increase to 3.6% versus 3.5% previous readings. Should the jobs report fail to shake the current market view of easy rate hikes from the RBA, the AUDUSD may witness further downside amid grim sentiment.
Technical analysis
AUDUSD needs to stay beyond a seven-month-old descending trend line, previous resistance around 0.6730, to keep buyers directed towards the 200-DMA hurdle surrounding 0.6950.
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