Meanwhile, USD/JPY is trying to settle above the 135.00 level.
The dynamics of commodity markets play an important role for the current trading action in the Australian dollar and New Zealand dollar. Meanwhile, the Japanese yen is moving lower against the U.S. dollar after the release of FOMC Minutes.
Today, AUD/USD traders focused on the employment data from Australia. Employment Change report indicated that employment declined by 40,900 in July.
Unemployment Rate declined from 3.5% in June to 3.4% in July as Participation Rate decreased from 66.8% to 66.4%. The declining Participation Rate is bearish for the economy and bullish for wage inflation.
The dynamics of commodity markets will remain the key driver for AUD/USD and other commodity-related currencies today. Iron ore prices have been recently moving lower as China was forced to suspend operations at some steel mills due to power shortages. If problems with power in China persist, AUD/USD will find itself under more pressure.
The same drivers are in play for NZD/USD. Yesterday, NZD/USD suffered a sell-off despite the rate hike and hawkish comments from RBNZ.
The general market sentiment towards commodity-related currencies served as a more important catalyst for NZD/USD, and the pair managed to settle below 0.6300.
Today, NZD/USD will have a good chance to continue its pullback in case it settles below the 0.6250 level. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
USD/JPY traders prepare for inflation data from Japan, which will be released tomorrow. Inflation Rate is expected to decline from 2.4% in June to 2.2% in July.
Currently, USD/JPY is trying to settle above the 135.00 level. FOMC Minutes were less hawkish than expected, but they did not put any pressure on the U.S. dollar.
Traders believe that the Bank of Japan will be forced to remain dovish to provide more support to the economy in the upcoming months, so USD/JPY remains under pressure. A successful test of the 135.00 level will push USD/JPY towards the resistance at 135.60.
For a look at all of today’s economic events, check out our economic calendar.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.