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AUD/USD looks vulnerable below 0.7500, NFP eyed

  • Shrugs-off better China trade, Aus home loans data?
  • US payrolls and wages data in focus.
  • Exposed to further downside risks.

The AUD/USD pair remains better offered, gyrating just above the 0.75 handle, as the bears fight for control amid the sell-off in iron-ore prices and upbeat Chinese trade figures.

AUD/USD: Firmer DXY weighs

The spot is seen consolidating its overnight sell-off and remains confined in a tight range, with every upside attempt rejected near 0.7520 region. Sellers continue to lurk at higher levels, as the recent slew of downbeat Aus data combined with weaker iron-ore prices undermines the sentiment around the AUD. Moreover, broad-based US dollar rally on optimism surrounding the US political climate further keeps the recovery in check.

The Australian trade surplus narrowed to AUD 105 million in October from the September figure of AUD 1604 million, while the Q3 growth numbers showed that the economy expanded by 0.6% versus a 0.9% increase seen in Q2 and 0.7% expected.

However, over the last hour, the Aussie managed to find some support from the better-than-expected Chinese trade report, which showed exports surging, a sign of healthy external demand from China. More so, higher oil and copper prices also help keep the losses.

Looking ahead, the next direction in the AUD/USD pair will be determined by the US NFP data, which is expected to have a major impact on the USD price-action going forward. Also, of note remains the Chinese inflation data due tomorrow.  

AUD/USD Preferred Strategy

Jim Langlands at FX Charts writes: “Trading from the short side continues to be the plan ahead of next week when the Fed is expected to hike rates. I, therefore, suspect that further upside for the Aud will be limited and selling into rallies is still preferred. Note that the China CPI is due tomorrow and could impact on the Aud and Monday’s open.”

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