Bullish View
- Set a buy stop at 0.7750 and a take-profit at 0.7817.
- Add a stop-loss at 0.7700.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 0.7700 and a take-profit at 0.7650.
- Add a stop-loss at 0.7750.
The AUD/USD pair was little changed in the Asian session as traders reflected on the mixed US jobs data and the relatively strong Australian data. It is trading at 0.7736, which was slightly below Friday’s high of 0.7747.
Australian and US Data
The biggest catalyst for the AUD/USD pair is the mixed economic data from the United States. On Friday, data showed that the US hiring continued in May as the country continued to reopen. The economy added 559,000 jobs in May while the unemployment rate dropped from 6.1% in April to 5.8% in May.
While the total NFP was better than the revised 278,000 recorded in May, it was lower than the median estimate of more than 900,000. Also, the data was still lower than the 785,000 jobs that were added in March this year. It was also lower than the private payrolls data published by ADP on Thursday.
The AUD/USD pair rose shortly after the non-farm payrolls data because they sent a signal that the Federal Reserve will still maintain its monetary policy intact for a while.
The AUD/USD pair is also reacting to the latest Australian Service PMI data. According to Markit, the services index rose from 61.0 in April to 61.2 in May this year. This is further evidence that the Australian economy is recovering at a relatively faster pace because the services sector is the biggest employer. Meanwhile, according to ANZ, jobs advertisements increased from 4.9% in April to 7.9% in May.
AUD/USD Technical Analysis
On the four-hour chart, we see that the AUD/USD pair rose sharply on Friday after the latest US jobs data. The pair rose from the Friday’s low of 0.7646 to a high of 0.7748. This was a 1.35% jump.
The pair is slightly below the upper side of the descending channel and slightly above the 25-day and 15-day moving averages. It is also slightly above the 38.2% Fibonacci retracement level.
Therefore, the pair may resume the upward trend as investors price in a more dovish Federal Reserve. If this happens, the pair will likely test 0.7817, which was the highest level on May 18. The other scenario is where the price retreats as bears target the lower side of the channel at 0.7650.
