AUDUSD trimmed its Thursday gains by -0.22% ahead of the US Jobs Data. The Australian dollar has been boosted by positive Trade balance data on Thursday. Australia’s trade balance data for April beat expectations by rising to 10.495B from the surveyed 9.300B. The data indicates a resilient economic performance amidst slowing demand for commodities.
On Wednesday, Australia’s GDP YoY data increased to 3.3% from the estimated 2.9% while GDP MoM data grew from 0.5% expected to 0.8%. The data lifted investors’ sentiments about a rate hike by the Reserve Bank of Australia at the June 7 policy meeting. Markets are pricing in a 25bps hike to 0.60% from the current 0.35%.
On the other hand, the USD remains stronger ahead of the US job data. Fed member Brainard renewed support for a rate hike in the US as prospects of a pause in September weighed on the dollar strength. The US expects the fewest jobs added since covid recovery.
The AUDUSD extended gains for the 3rd week as bulls recovered from the 0.6850 level. The pair is currently in a falling channel and a failure to break outside of the channel may soon renew selling pressure towards the 0.6980 area. Upside gains are capped by a 50-day moving average at 0.7260 and a break above that area may open room for further upside towards the 0.7600 level, coinciding with a 1-year resistance.
The MACD indicator shows the pair is trading at a critical level as Volume bars are trading at the 0.0000 benchmark. However, the moving averages are still in the bearish region indicating a possible trade to the downside in the near term if the 0.72600 resistance holds. A close above the 0.7260 may open room for a rally to the upside.
The ActivTrader sentiment shows that 61% of retail traders are bearish on the AUDUSD. The pair is trading at a pivot level ahead of the critical US Jobs report and a better than expected wage growth and Jobs reports may weigh down the Aussie in the near term.
The RBA is expected to hike rates by 25bps on the 7th of June and it could be a major tailwind for bulls in the near term.
The AUDUSD has experienced modest gains after breaking above the 0.7050 area, coinciding with the Bollinger band baseline (yellow). Bulls closed above the 200-day moving average on Thursday, a critical barrier for the pair in the near term. A failure to break above the 0.72600 may soon see receding bullish interests as the pair may retrace towards the 0.7100 support, coinciding with the Bollinger Band Baseline.
The RSI reading is above 50 (the neutral level) indicating bullish momentum has not yet peaked and a possibility to trade higher is higher. A break above the 0.72600 may renew a bullish appetite toward the 0.7600 level. US jobs report will do more to set the direction of the pair in the near term.