AUD / USD with modest losses below 0.7300 level, lacks continuation

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  • A modest short hedging move in the USD puts some pressure on the AUD / USD.
  • The pair’s bulls ignore the optimistic details in the Australian jobs report.
  • Pessimistic expectations from the Fed could limit the USD and help limit the pair’s slide.

The pair AUD/USD moves with a negative bias at the start of the European session on Thursday, falling to daily lows around the 0.7275-80 region.

Having struggled to capitalize on the previous day’s bounce of around 60 pips, the pair has found new selling on Thursday and has ignored the optimistic details of the Australian jobs report. In fact, the number of people employed unexpectedly increased by 178,800 in October compared to estimates that pointed to a reading of -30,000.

Additional details revealed that the unemployment rate rose to 7.0% during the month reported from the previous 6.9%. However, the figure was still better than market expectations of an increase to 7.2%, although it has done little to impress the pair’s bulls or help AUD / USD attract significant purchases.

The US dollar has seen a modest short-hedging move during the first half of trading action on Thursday, which has been seen as a key factor putting some pressure on the AUD / USD pair. But nevertheless, pessimistic expectations from the Fed could limit the rise of the dollar and help limit the pair’s losses, at least for now.

Despite optimism about a possible coronavirus vaccine, Investors remain concerned about the economic consequences of the imposition of new restrictions in several US states. This, in turn, has fueled expectations of further stimulus from the Fed, which should prevent USD bulls from opening aggressive positions.

Market participants are now awaiting the US economic calendar, which features the Philadelphia Fed Manufacturing Index releases and initial weekly jobless claims. The data, along with developments around the coronavirus saga and broader market risk sentiment, could generate some short-term trading opportunities around the AUD / USD pair.


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