Australian dollar hotspots
AUD / USD jumps back to its monthly low of 0.7308 to protect the September opening range, but the update of the Australian Employment Report could prolong the exchange rate as job growth is expected to decline for the second time in 2021.
AUD / USD exchange rate for the Australian Employment Pact
AUD/USD is able to trade more than a 50-day SMA (0.7356) in an attempt to track last week’s decline, but the negative decline in the moving average sets the outlook for the exchange rate harsh as it trades in the second half of the year.
Looking ahead, recent data printouts from Australia may stretch to AUD / USD, as employment is projected to decline by 90.0,000 in August, while the unemployment rate is expected to rise to 4.9% from 4.6% over the same period. In response, the Reserve Bank of Australia (RBA) may maintain its current monetary policy stance as the central bank warns that ‘tThe Delta outbreak is expected to delay recovery, but not off the rails, “And the governor Philip Lowe and Co. may stick to the same script for the next interest rate decision on October 5 as “tthe board is committed to maintaining highly supportive financial conditions in order to achieve full employment and target inflation in australia.“
Until then, signs of a slowdown in Australia could affect the AUD / USD as the RBA plans to implement its $ 4 billion a week government bond purchase program.at least until mid-February 2022However, a further decline in the exchange rate may contribute to the recent decline in retail sentiment, as at the beginning of this year.
The IG customer feelings report shows 51.12% of traders are now net length AUD / USD, traders with a long and short relationship standing from 1.05 to 1 p.m.
The number of merchants online is 6.35% higher than yesterday and 12.93% higher than last week, while the number of short traders is 10.45% higher than yesterday and 19.38% lower than last week. The rise in net long-term interest rates has contributed to the decline in retail sentiment, with 47.18% of traders having a net long AUD / USD last week, while the decline in a short net position is due to the exchange rate bounces back before monthly low (0.7308).
With this in mind, the AUD / USD Australia Employment Report may face range conditions as it protects the September opening range, but the lowest rise in August (0.7106) could turn into a broader trend correction as the exchange rate falls to an annual low in the second half of the year.
Daily schedule of AUD / USD exchange rate
Source: Trading View
- Keep in mind that AUD / USD is below the 200-day SMA (0.7604) for the first time in more than a year with a decline since the peak of May (0.7891) pushing Relative Strength Index (RSI) for the first time since March 2020.
- As a result, the 50-day SEA (0.7356) showed a negative decline as AUD / USD turned to annual lows in the second half of 2021, but the exchange rate has broken out of the downward channel earlier this year after a failed attempt to close below 0.7130 (61.8% retracement)) to 0, 7140 (23.6% enlargement).
- Despite this the rebound from the lowest level in August (0.7106) may turn out to be a correction in a broader trend such as AUD / USD monitors the September opening range, with an unsuccessful attempt to test the 0.7500 (50% retracement) handle, pushing the exchange rate below 0.7370 (38.2% expansion) to 0.7380 (61.8% retracement).
- Failure to keep above 50-day SMA (0.7356) can send AUD / USD back to a monthly low (0.7308) with a break / close below 0.7290 (23.6% expansion) in the range, which opens a Fibonacci overlap of about 0.7180 (61.8% retracement) to 0 , 7210 (78.6% retracement).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong