- AUD/USD adds to intraday recovery gains and refreshes daily high in reaction to US mixed employment report.
- The US economy added 312,000 jobs in August and the unemployment rate unexpectedly rose to 3.7%.
- Aggressive expectations from the Fed should help limit any significant decline in the USD and cap gains for the pair.
The pair AUD/USD extends its recovery move during the early American session and jumps to a fresh daily high around 0.6850 in reaction to the US mixed employment report.
Headline NFP data showed the US economy added 312,000 jobs in August, against an expected 300,000, although the reading was well down from 526,000 the previous month. Also, the unemployment rate unexpectedly rose to 3.7%, from 3.5% previously. Also, softer-than-expected median hourly earnings pulled the dollar off two-decade highs hit the previous day. This is seen as a key factor providing a modest boost to the AUD/USD pair.
Spot prices have reversed overnight losses and hit the lowest level since July 18, although a further recovery still looks elusive. Although the US jobs data is slightly disappointing, the growing acceptance that the Federal Reserve will continue its aggressive tightening policy could continue to act as a tailwind for the dollar. Aside from this, concerns about a deeper global economic slowdown could help limit the AUD/USD’s upside, at least for now.
Even from a technical point of view, the positive intraday move stops near the 100 hourly SMA, currently around 0.6850, which should now act as a sweet spot for intraday traders. This makes it prudent to wait for strong follow-on buying before confirming that the AUD/USD has formed a short-term bottom and positioning for any further appreciation moves.
Technical levels to watch
Source: Fx Street
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