The AUDUSD currency pair has seen a positive movement for three consecutive days at a price of 0.65742. However, this upward momentum is not being sustained.

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• AUD/USD gains positive traction for the third straight day, albeit lacks follow-through.

The pair currently trades last at 0.65742.

The previous day high was 0.661 while the previous day low was 0.6543. The daily 38.2% Fib levels comes at 0.6584, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6568, expected to provide support.

The AUD/USD pair attracts some buying for the third successive day on Monday and trades around the 0.6580 region during the Asian session. This marks the third straight day of a positive move and is sponsored by subdued US Dollar (USD) demand, though spot prices remain below Friday’s swing high touched in reaction to the mixed US monthly employment details.

The Australian Dollar (AUD) continues to draw support from the Reserve Bank of Australia’s hawkish quarterly Statement on Monetary Policy (SOMP) released on Friday, which indicated that interest rates may still need to go higher. Adding to this, Commerce Ministry announced that the country will lift the anti-dumping and anti-subsidy tariff on barley imports from Australia, which turns out to be another factor acting as a tailwind for the Aussie. The USD, on the other hand, remains on the defensive for the third successive day and turns out to be another factor lending some support to the AUD/USD pair.

The headline NFP showed that the US economy added 187K jobs in July, lower than the 200K estimates. Moreover, the readings for May and June were also revised down, suggesting that demand for workers was slowing. This, in turn, halted the recent surge in Treasury yields and is seen undermining the buck. That said, solid wage gains and a dip in the unemployment rate to 3.5% signalled continued tightness in the labour market. This, along with hopes for a soft economic landing, should allow the Federal Reserve (Fed) to keep rates higher for longer, which helps limit the USD losses and caps the AUD/USD pair.

Apart from this, a softer tone around the Asian equity markets, along with China’s economic woes, further contributes to keeping a lid on the risk-sensitive Aussie and warrants caution for bulls. Traders now look to speeches by influential FOMC members for some impetus in the absence of any relevant market-moving economic data from the US on Monday. The fundamental backdrop, meanwhile, makes it prudent to wait for strong follow-through buying before positioning for an extension of the AUD/USD pair’s recent recovery move from the vicinity of the 0.6500 mark, or a two-month low touched last Thursday.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6578 at the time of writing. Pair opened at 0.6569 and is trading with a change of 0.14 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6721, 50 SMA 0.6702, 100 SMA @ 0.6689 and 200 SMA @ 0.6733.

The previous day high was 0.661 while the previous day low was 0.6543. The daily 38.2% Fib levels comes at 0.6584, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6568, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6538, 0.6507, 0.6471
• Pivot resistance is noted at 0.6605, 0.6641, 0.6672

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