- AUD/USD is currently trading at 0.6974 between a tight range of 0.6972 and 0.6979.
- All eyes look ahead to Nonfarm Payrolls, brushing aside Australian loan approval.
AUD/USD was drifting higher overnight from 0.6965 to 0.6994 then easing back to 0.6980 once the ECB noise had dried up and the dollar was able to recover lost ground. In Asia, we have seen very little action in the pair, and there was nothing on Australia’s housing market, despite being a hot topic at the moment – The official data on loan approvals came out as follows:
- Investment Lending -2.2% (vs. expected 1.0%, prior -2.7%).
- Owner-occupied +1.0% (vs. expected 0.0%, prior -3.4%).
However, analysts at Westpac noted that the data should be discounted by the obvious distortions of the unusually close timing of Anzac Day and Easter and the 18 May election which presented sharp differences in housing policies.
Nonfarm Payrolls coming up
Meanwhile, all eyes now turn to the Nonfarm Payrolls data event in the US session today:
“Consensus on US May non-farm payrolls is for a 180k gain, with the +/-1 standard deviation range 142k to 204k (Bloomberg survey). This follows a strong 263k in Apr. The separately calculated unemployment rate is expected to hold at 3.6%. Markets often respond most sharply to average hourly earnings, where expectations are 0.3%mth, 3.2%yr, the latter steady vs Apr and still a little below the 3.4% post-GFC high set in February,”
the analysts at Westpac explained.
Valeria Bednarik, the Chief analyst at FXStreet explained that the fact that the AUD/USD pair is unable to run beyond the 0.7000 level, despite broad dollar’s weakness, is somehow discouraging for bulls and may resume its decline this Friday, particularly if the US employment report results upbeat:
“Ahead of the event, the pair is struggling to hold above a bullish 20 SMA, which continues heading north above the larger ones, while technical indicators turned sharply lower, the Momentum indicator challenging its mid-line and the RSI just above the 50 level.”
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