AUD/USD Forex Technical Analysis – Weak Greenback Driving Demand for Commodity-Linked Aussie

The Australian Dollar is edging higher for a second session on Friday after recovering from an earlier loss. Demand for the commodity-linked Aussie is up despite the release of a stronger-than-expected U.S.  jobs report. The news helped drive the U.S. Dollar lower and the Australian Dollar higher because it eased worries about the U.S. economy while adding to concerns about aggressive interest rate hikes by the Federal Reserve.

At 19:00 GMT, the AUD/USD is at .6853, up 0.0013 or +0.19%. The Invesco CurrencyShares Australian Dollar Trust ETF (FXA) is trading $67.24, down $0.51 or -0.75%.

The Aussie Dollar was under pressure shortly after the release of a stronger-than-expected U.S. jobs report because it cemented expectations of another 75 basis-point rate hike at the Federal Reserve’s policy meeting later this month. The currency turned around, however, as the news also eased the chances of a recession, encouraging investors to dump safe-haven U.S. Dollar positions.

In economic news, data released by the U.S. Labor Department showed Non-Farm payroll employment jumped by 372,000 jobs in June after surging by a revised 384,000 jobs in May. Economics had forecast employment to increase by 268,000 jobs.

The report also showed that unemployment remained at 3.6% for the fourth month in a row, matching economist estimates.

Short-Term Outlook

Trader reaction to the minor pivot at .6863 is likely to determine the direction of the AUD/USD into the close on Friday.

Bullish Scenario

A sustained move over .6863 will indicate the presence of buyers. If this move creates enough late session momentum then look for a surge into the short-term retracement zone at .6916 to .6952. This is the last potential resistance before the main top at .6964.

Taking out .6964 will change the main trend to up. This could trigger an acceleration into the intermediate retracement zone at .7023 to .7084.

Bearish Scenario

A sustained move under .6863 will signal the presence of sellers. This could trigger an intraday break into a pair of former main bottoms at .6811 and .6777.

The key price to watch is the low at .6762. This is the last potential support before the May 15, 2020 main bottom at .6402.