AUD/USD all set for pullback

AUD/USD surged to 0.8979 yesterday after mixed US data, however we saw a rejection at 76.4% fib level as expected; the pair was closed at 0.8945 on Thursday.

At the moment of writing Aussie Dollar is being traded at 0.8942 against the US Dollar in London opening session. Immediate resistance can be seen around 0.8976-82, 76% fib level and a major hurdle ahead of previous wave’s swing high. A break and close above 0.8980 may threaten 0.9085 which is high of January 13. Bias shall remain bearish as far as the pair is being traded below 0.9085.

On downside, support may be noted around 0.8893 that is 55 Daily Moving Average (DMA), ahead of 0.8870 i.e. a major 50% fib level support. Below 0.8870, other important support levels include 0.8818 and 0.8757. It is very likely that the pair might rebound ahead of 0.9085, just as I mentioned in my previous article about AUD/USD last month.

Today, investors are seen very cautious ahead of the US labor department reports on Non-Farm Payrolls and Unemployment Rate for the month of January. Analysts have predicted 185K reading this time around as compared to December’s 74K figure which was well below expectations due to bad weather. Regarding unemployment rate, forecast is same i.e. 6.7% jobless rate is expected for January, even a slight drop in unemployment may trigger a huge upside momentum in greenback because more tapering in monthly asset purchase program is dependent on positive outcomes from labor market. Federal Reserve has set 6.5% threshold for jobless rate after which policymakers might consider tight monetary policy stance.

Earlier on Thursday, two separate reports showed that jobless claims in the US fell more than expectations to 331K while trade balance deficit remained $38.70 billion, more than expectations, at the end of last month.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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