General analysis AUDUSD for 08.07.2022
Current dynamics
The AUD/USD pair witnessed a decline in the second half of the trading session today, Friday. The pair lost all the gains of the first half of the trading day. The pair failed to continue the positive performance that it had yesterday, and to break out of its lowest level in two years.
The Australian pair's recent gains may be related to hopes of improving trade relations between the US and China. US President Joe Biden is preparing to meet with his top advisers on Friday to determine tariff policy on China. Previously, diplomats from the United States and China referred to an in-person meeting after the latest virtual trade talks saw progress, as well as the gradual lifting of the two-month-long lockdown restrictions in Shanghai due to COVID-19.
However, the US dollar returned to demand amid expectations of a further hike in the Federal Reserve. Market bets have been reaffirmed by the recent statements of the US Fed members.
Where the US Federal Reserve member Waller said on Thursday, that the Fed needs to move to a tighter situation to control inflation, and indicated his support for the US Federal Reserve to raise interest rates by 75 basis points in July and perhaps 50 basis points in September.
As US Federal Reserve member James Bullard said Thursday, the US Federal Reserve's future guidance helps the bank move more quickly to control high inflation.
On the data side, the US macroeconomic data came to show that the number of initial jobless claims in America increased last week to 235 thousand, from 231 thousand in the previous week, while expectations indicated a decrease at 230 thousand. Economic data also showed that the deficit in the US trade balance fell last May to its lowest level this year, recording $85.5 billion.
On the Australian side, the reading of the trade balance index showed a widening of the surplus to 15.97 billion Australian dollars, compared to 13.25 billion Australian dollars, which was revised from the 10.50 billion Australian dollars surplus last April, contrary to expectations that the surplus would shrink to 10.70 billion Australian dollars, This came as the growth of exports accelerated to 9.5% compared to 5.0% and imports rose 5.8%, compared to a 0.8% decline in April.
Looking ahead, traders are awaiting the US jobs report for June, as expectations indicate that the major non-farm payrolls in the United States are expected to record the smallest monthly increase in jobs since April of last year, declining to 268 thousand from 390 thousand for the month of June while the unemployment rate is likely to remain unchanged at 3.6%.
Support and resistance levels
On the 4 hour chart, the tool is testing a consolidation at the Bollinger Bands moving average. The indicator is directed sideways and the price range has contracted, indicating that the current trend is about to change. The momentum chart is above the 100 level, which gives sell signals. The Envelopes indicator gives buy signals.
- Support levels: 0.68175, 0.67600, 0.66775.
- Resistance levels: 0.68650, 0.69225, 0.69875.
Trading scenarios
- Short positions should be opened at the 0.68175 with a target of 0.67600 and a stop loss at 0.68650. Implementation period: 1-3 days.
- Long positions can be opened above the level of 0.68650 with a target of 0.69225 and a stop-loss at the level of 0.68175. Implementation period: 1-3 days.