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AUD/USD fails to hold above 0.7600 and drops to fresh 4-month lows

  • After short-lived recovery drops to fresh 4-month lows. 
  • USD recovers momentum as US yields move off session lows. 
  • Data ahead: Australian inflation expectations and jobs reports. 

The AUD/USD pair printed a fresh 4-month low near 0.7570 during the US session after a short-lived recovery. The greenback recovered ground across the board and erased most of its losses. 

AUD weakness ahead of jobs report

The Aussie is among the worst performers on Wednesday affected by Australia wage growth data released on Asian hours that pushed AUD/USD below 0.7600. On Wednesday attention would be on the inflation expectations data and also on the jobs report. Employment is expected to have risen by 17.500 in October in Australia. 

Today’s US data included CPI and retail sales. Overall, numbers came in line with expectation with positive revisions to previous sales data. The greenback failed to rally, although, it gained momentum afterwards.

Commodity currencies weakened during the Amerind session amid a slide in equity prices and a retreat in gold. AUD/USD moved back above 0.7600, recovering ground at the beginning of the US session but turned again to the downside. Recently printed a fresh 4-month low at 0.7572. At the moment of writing it was trading at 0.7580/85 headed toward the lowest close since early July. 

Technical outlook 

The main trend continues to point to the downside and today it accelerated the decline. Its failure to hold above 0.7600 shows that weakens persists in the pair. 

The 4 hours chart shows that the price is well below a bearish 20 SMA, while technical indicators remain steady near oversold readings, with the RSI indicator heading marginally lower around 34, leaning the scale towards the downside, explains Valeria Bednarik, Chief Analyst at FXStreet. 

She warns that the upcoming direction will be set by the November Consumer inflation expectations for November and the October employment data. 

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