AUDUSD hovers to the highest level since April 2019 as investors continue to dump the USD on fears that the rising number of new coronavirus cases will halt the economic recovery in the country. Even manufacturing data shows some signs of improvement the employment data are still weak.
The U.S. private payrolls increased by 167K in July below the analyst’s estimates of one million. The U.S. jobs creation slowed down in July. The U.S. job market has recovered almost 8 million jobs but is well below the 19.7 million jobs lost during the coronavirus lockdown in March and April 2020.
On the other hand, the Australian dollar supported by the faster than expected economic recovery in China, which absorbs many of the Australian resources. Economic data from Australia continues to improve. Australia exports in June continue to rise, and now the trade surplus has reached highs of $8.2 billion. The retail sales increased by 2.7% in June, better than the 2.4% analysts expectations.
RBA in its policy meeting earlier on the week kept interest rates unchanged matching the market’s expectations. The central bank also left the target of the 3-year yield at 0.25%.
AUDUSD Technical Analysis
AUDUSD is 0.22% higher at 0.7206 as bulls are in full control of the pair, and the pullbacks are looking like a buying opportunity. USD will be the primary driver of the pair, and as the weakness is set to continue, we could expect higher levels for AUD.
On the daily chart, first resistance for the pair is at 0.7216, today’s top. A break above would face the resistance at 0.7242 the 18-month highs. We have to go back to February 5, 2019, to find the next supply zone at 0.7267.
On the flip side, the AUDUSD intraday support stands at 0.7183 the daily low. Next target for bears would be at 0.7067 the low from August 3. A move below 0.6980 – the 50-day moving average will invalidate the recent bullish trend.