Bearish view
Bullish view
- Set a buy-stop at 0.6360 and a take-profit at 0.6430.
- Add a stop-loss at 0.6300.
The AUD/USD exchange rate crashed to the lowest level in more than 11 months as Australia’s bond yields jumped. The pair slipped to 0.6288, continuing a downtrend that started in February 2021 when it peaked at 0.800.
Australia bond rout
The AUD/USD pair has been in a strong sell-off recently as the US dollar rally continued. A major cause of this trend was the soaring long-term government bonds. In the US, the 30-year Treasuries rose to 5.0% for the first time since 2007. The 10-year jumped to 4.70% as concerns about the economy continued.
These yields pulled back slightly after the weak private non-farm payrolls data. According to ADP, the private sector added just 89k jobs in September after creating over 189k in the previous month. Another report showed that the country’s services PMI dropped to 50.1 in September as it approached the contraction zone of 49.
Australia’s long-term bond yields have also risen, with the 10-year bonds yielding 4.60%, the highest level since 2009. The yields rose even after the Reserve Bank of Australia (RBA) decided to leave interest rates unchanged at 4.1% on Tuesday.
Looking ahead, the AUD/USD pair will react to the upcoming economic data from the United States. First, the US will publish the latest trade numbers for August. Second, the next data to watch will be the upcoming initial and continuing jobless data.
Most importantly, several Federal Reserve officials like Mary Daly, Tom Barkin, and Loretta Mester. These officials will provide more information about the state of the economy and what to expect in the next meetings.
The US will next publish the official non-farm payrolls (NFP) data on Friday. Economists polled by Reuters expect the data to show that the economy added 163k in September while the unemployment rate remained at 3.7%.
AUD/USD technical analysis
The AUD/USD exchange rate continued falling ahead of the upcoming US non-farm payrolls (NFP) data. It slipped below the important support level at 0.6360, the lowest point since August. On the daily chart, the pair dropped below the 50-day moving average while the Money Flow Index (MFI) crossed the neutral point at 50.
The pair moved below the Ichimoku cloud and the crucial support at 0.6461, the lowest swing on May 31st. Therefore, the pair will likely continue falling as sellers target the next key support at 0.6250.
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