Torn between dollar buying and risk on rotation
The AUDUSD is following the dollar higher seen after the US employment report. Having said that, the declines still have not been able to take out the low for the day.
The apprehension may be as result of the markets conflict between the higher US dollar and the risk on temptation. Although the NASDAQ indices are lower, they are way off the low levels for premarket trading. The Dow industrial average is higher. The S&P index is back near unchanged levels in premarket trading. The stocks reaction once the markets open at the bottom of the hour will likely be eyed by traders.
Technically, getting below the 0.72509 level (low for the weekend lowest level since August 27), would have traders looking toward the 61.8% retracement of the move up from the August 20 swing low at 0.72414. Below that and traders will be eyeing the lower channel trendline which comes in at 0.7222 currently (and moving lower).
What we also know technically, is the buyers had the opportunity to move higher in the London session after breaking above the topside channel trendline. However sellers lined up against its 200 hour moving average (green line), which gives the sellers the nod for control.
For the week, the high price was reached on Tuesday at 0.74128. The run lower was helped by a run out of risk. This week Australia also broke its 30 year string of avoiding a recession. The 2nd quarter GDP came in negative for the 2nd consecutive quarter, tilting the economy into recession.
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