- The US non -agricultural payrolls (NFP) establish the scenario for Fed fees expectations, serving as a key catalyst for the aud/USD torque.
- The Australian dollar becomes cautious before the commercial data of Australia and the PMI of services of China.
- The AUD/USD stops below 0.6600 after overcoming wedge resistance.
The Australian dollar is negotiating flat against the US dollar on Wednesday, while both economies expect the publication of critical economic data on Thursday.
At the time of writing, the Aud/USD Ronda 0.6584, with the operators positioning before the next catalysts that could boost volatility.
The Australian dollar becomes cautious before the commercial data of Australia and the PMI of China Services
The operators are cautious before the commercial balance of Australia in May, which is expected to show a surplus of 5.09 billion AUD, slightly below 5.41 billion AUD in April.
Meanwhile, it is forecast that the SERVICE PURCHASE INDEX (PMI) Caixin of China for June is 51, a slight decrease since 51.1 in May.
This is important because the AUD/USD is highly sensitive to the commercial and growth data of China, and Thursday’s publications could mark the tone before the key data of the US labor market that will be published later in the day.
A downward surprise in any of the figures could press the Australian dollar, while stronger numbers of what was expected could offer support for the AUD/USD.
Thursday’s non -agricultural payroll (NFP)
But the true focus will be in the US non -agricultural payroll (NFP). The report is expected to show that 110,000 jobs were added to the US economy in June, a decrease since May 139,000. Meanwhile, the unemployment rate is expected to increase slightly to 4.3%, from 4.2% in May.
The report is highly anticipated, especially after Wednesday’s ADP employment change report, which arrived well below expectations with a net loss of 33k jobs.
The Federal Reserve has maintained interest rates between 4.25%and 4.50%, while the Australian Reserve Bank recently cut the rates at 3.85%, citing internal weakness. The divergence in the policy roads has limited the bullish potential of the Australian dollar in recent weeks.
Speaking at the European Central Bank forum (ECB) on Tuesday, Powell declared that “it will depend on the data, and we are going to meeting by meeting. I would not rule out any meeting or put it directly on the table. It will depend on how the data evolves.”
These comments suggest that the result of June non -agricultural payrolls could mark the tone for the next decision of Fed’s interest rates.
The aud/USD stops below 0.6600 after overcoming wedge resistance
The AUD/USD remains just above the 61.8% fibonacci recoil level about 0.6550, with the price action finding temporary support above the ascending wedge formation.
The torque is maintained above the 50 -day exponential (EMA) mobile average at 0.6464 and the 200 -day EMA at 0.6432, reinforcing the bullish bias.
Aud/USD Daily Graph
At the time of writing, the psychological level of 0.6600 acts as immediate resistance. A sustained rupture above this threshold could open the road to the maximum of November at 0.6688, aligned with the 78.6% setback in 0.6722.
At the bottom, the initial support is about 0.6550, followed by the confluence zone around 0.6463–0.6428. A rupture below 0.6400 would invalidate the upward structure and expose the torque to deeper losses.
The relative force index (RSI) is about 62, suggesting space for a greater rise before overcompra conditions arise.
Australian dollar – frequent questions
One of the most important factors for the Australian dollar (Aud) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a country rich in resources, another key factor is the price of its greatest export, iron mineral. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and commercial balance. The feeling of the market, that is, if investors are committed to more risky assets (Risk-on) or seek safe shelters (Risk-Off), it is also a factor, being the positive risk-on for the AUD.
The Australian Reserve Bank (RBA) influences the Australian dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of the interest rates of the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2% -3% by adjusting the interest rates or the low. Relatively high interest rates compared to other large central banks support the AU, and the opposite for the relatively low. The RBA can also use relaxation and quantitative hardening to influence credit conditions, being the first refusal for the AU and the second positive for the AUD.
China is Australia’s largest commercial partner, so the health of the Chinese economy greatly influences the value of the Australian dollar (Aud). When the Chinese economy goes well, it buys more raw materials, goods and services in Australia, which increases the demand of the AU and makes its value upload. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian dollar.
Iron mineral is the largest export in Australia, with 118,000 million dollars a year according to data from 2021, China being its main destination. The price of iron ore, therefore, can be a driver of the Australian dollar. Usually, if the price of iron ore rises, the Aud also does, since the aggregate demand of the currency increases. The opposite occurs when the price of low iron ore. The highest prices of the iron mineral also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive for the AUD.
The commercial balance, which is the difference between what a country earns with its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly requested exports, its currency will gain value exclusively for the excess demand created by foreign buyers who wish to acquire their exports to what you spend on buying imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the commercial balance is negative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
