AUDUSD Retreats as Bears Control the Game
Next week is going to be a big week for Australia. At the top of next week’s roster of events is the RBA rate decision due on Tuesday. Market participants initially priced in a 25-basis point rate cut. However, the positive labor figures from Australia has everyone convinced that the RBA would stand pat.
Then on Thursday, the country’s retail sales and trade balance figures are due. Consumer spending for December is anticipated to print a 0.2% uptick. Meanwhile, the trade balance report for the same month is estimated to show that exports outpaced imports by 4.15 billion AUD.
The highly-anticipated Non-Farm Payrolls report for January is due on Friday. Analysts esimate that 156,000 jobs were generated and that the unemployment rate remained steady at 3.5%. Meanwhile, average hourly earnings is seen at 0.3%. Ahead of the government report, the ADP will attempt to predict the official data. On Wednesday, the report is seen to come in at 155,000.
Aside from employment data, the ISM manufacturing PMI report for January is due on Monday with the consensus at 48.0. Then the non-manufacturing version of the report is anticipated at 55.1.
On the daily time frame, we can see that AUDUSD fell to its 3-month lows. Reversal candles around the 0.6700 handle could mean that the currency pair may soon bounce to 0.6800 and test resistance around the 100 SMA. On the other hand, a close below 0.6667 could indicate that AUDUSD may fall to its 2008 lows at 0.5970.
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Just like the US, New Zealand will also release its employment data. Due late on Tuesday, labor figures are seen to print a 0.3% uptick for Q4 2019. Meanwhile, the unemployment rate is eyed at 3.8%.
The recent sell-off on NZDUSD has pushed the currency pair back down to 0.6450. On the weekly chart, we can see that the currency pair is now testing a previous trend line for support. Reversal candles at this price may mean that NZDUSD may resume its rally above 0.6500. Conversely, a close below the trend line may suggest that the currency pair could fall to its 2019 lows around 0.6200.
Canada is also slated to release its labor data at the same time as the US NFP. On Friday, the country is expected to have added 37,800 jobs in January. Meanwhile, the unemployment rate is at 5.8%.
On the daily time frame, USDCAD is testing resistance around 1.3240 where the 200 SMA is. This price also coincides with the falling trend line from connecting the highs of June 3 and November 26. A strong close above this price may suggest that USDCAD could rally higher to resistance at 1.3300. On the other hand, reversal candles around this price may suggest that the currency pair could fall to support at 1.3050.