At hourly support, the AUD/USD is putting the bull’s pledges to the test.
The focus of the calendar this week will be on Australian jobs statistics and US CPI.
The Australian dollar is currently down 0.26 percent against the US dollar, having fallen from a top of 0.7495 to a low of 0.7448.
Due to fears of a pandemic, the US dollar has regained control of the FX board. Global leaders, like as Boris Johnson of the United Kingdom, have cautioned that “this pandemic is not finished,” and investors are taking precautions.
‘While the main suite of COVID vaccines is still very effective in avoiding serious sickness from the Delta version, fears of a viral outbreak are growing.
“The situation is likely to dampen enthusiasm for both business and pleasure travel to other Australian states, as the possibility of becoming trapped is all too real,” ANZ Bank analysts predicted.
Meanwhile, the Employment Rate is the focus of domestic attention on the economic calendar.
Analysts at TD Securities believe it declined in June as a result of the lockdown in Victoria, citing a drop in overall payrolls (-0.6 percent m/m) between the June and May LFS survey periods.
“As labor demand continues strong, we predict the participation rate to rise to 66.3 percent (last: 66.2 percent). The unemployment rate (u/e rate) is expected to rise to 5.4 percent from 5.1 percent earlier.”
In general, any discussion of early tapering in the United States is met with a frisson of hypersensitivity.
In recent months, the strength of the dollar has been connected with changes in US Treasury bonds. The USD soared the previous time the 10-year US Treasury yield went below 1.3 percent.
As a result, Tuesday’s US inflation statistics will be keenly scrutinized ahead of Federal Reserve Chair Jerome Powell’s speech on Wednesday and Thursday.
“We warn against extrapolating, in line with Fed officials’ citation of “transitory” factors, but another increase in used vehicle costs, together with reopening-related gains in airfares and hotel rates, presumably led to another substantial rise in the CPI,” TD Securities analysts said.
“Retail Sales, on the other hand, were likely close to flat; they have slowed since their stimulus-fueled 11.3 percent MoM jump in March.”
In terms of positioning, the USD index went from a tiny net short to a good net bullish position last week.
Meanwhile, as the Reserve Bank of Australia maintained a dovish tone, net AUD short positions increased to their highest levels since June 2020.
The price is at a key crossroads on a daily basis, and it can go either way at this point.
A break of support, however, would be expected to result in a severe negative extension given the bearish bias.
On an hourly basis, the bears are putting the bullish commitment to the test at the following critical support structure:/n
