AUD/USD Trims Weekly Losses Ahead of US NFP, Despite Recession Concerns and RBA’s Dovish Stance

Arslan Butt•Friday, April 7, 2023•1 min read

The AUD/USD is reducing its weekly losses, trading around 0.6680, as market participants anticipate the US Nonfarm Payrolls (NFP) during a slow Good Friday session. Consequently, the Australian currency pair registers its first daily gains in four days, supported by positive news from China, Australia’s key trading partner.

Nevertheless, the Reserve Bank of Australia’s (RBA) dovish stance, combined with recession concerns, puts downward pressure on the AUD/USD exchange rate.

From a technical perspective, the AUD/USD’s dismissal of a one-month bullish channel and a bearish moving average crossover, indicated by the 50-day moving average (DMA) cutting through the 100-DMA from above, keeps sellers optimistic. The steady Relative Strength Index (RSI) (14) line further reinforces the bearish bias.

As a result, the currency pair’s recent rebound may be short-lived, as long as it remains below the aforementioned channel’s lower line, near 0.6690 at the time of writing.

In addition to the immediate 0.6690 resistance, the 0.6700 psychological level may also challenge buyers before they take control.

However, the 50-DMA, 100-DMA, and the top line of the specified channel, at approximately 0.6785, 0.6800, and 0.6820 respectively, could pose obstacles for AUD/USD bulls afterward.

On the flip side, an ascending support line from last November, close to 0.6620 at the time of writing, acts as a foundation for the AUD/USD exchange rate.

Subsequently, the previous monthly low of 0.6564, also the year-to-date (YTD) low, will attract market focus.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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