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The Australian dollar is trending lower on Friday shortly before the release of the US non-farm wage report at 13:30 GMT. The greenback is also able to post its best week against the Aussie in over a month.

The Aussie has been under pressure for most of the week as investors shied away from riskier assets in response to a sharp rise in US Treasury yields after the minutes of the Federal Reserve meeting were released. revealed that central bankers planned to start shrinking its balance sheet soon after the end of its first interest rate hike.

At 11:30 am GMT, the AUD / USD is trading at 0.7155, down 0.0008 or -0.11%. The Invesco CurrencyShares Australian Dollar Trust (FXA) ETF on Thursday came in at $ 71.04, down $ 0.60 or -0.84%.

The December non-farm wage report is due for release at 1:30 p.m. GMT on Friday. Economists expect the economy to have created 422,000 jobs in December, according to estimates compiled by Dow Jones. The unemployment rate is expected to stand at 4.1%.

A higher than expected non-farm payrolls number is likely to be bearish for the AUD / USD as it will solidify the chances of an interest rate hike in March by the Federal Reserve. However, some traders say the news has already made its way into the market. This could lead to a limited reaction or even a short-lived rally due to profit taking.

Daily AUD / USD

Technical analysis of the daily swing chart

The main trend is upward on the daily swing chart, however, the momentum is downward. A trade through .7277 will signal a resumption of the downtrend. A move through .7083 will change the main trend down.

The minor trend is downward. It’s controlling momentum.

On the upside, the closest resistance is a pair of 50% levels at 0.7182 and 0.7212. The main resistance area controlling the short term direction of the AUD / USD is the 0.7275 to 0.7341 retracement area.

The short-term range is 0.6993 to 0.7277. Its retracement area at 0.7135 to 0.7101 is the next target area on the downside. The main trend being up, buyers could intervene on a test of this area. However, a sustained move below .7101 could trigger the start of a downward acceleration.

Technical forecasts of the daily swing chart

The direction of the AUD / USD on Friday will likely be determined by the reaction of traders at .7135 and .7182.

Bearish scenario

A sustained move below 0.7135 will indicate the presence of sellers. This could trigger a rapid breakout in .7101. Removing this level will lead to a test of the main bottom at 0.7083. A move to this level will change the main downward trend. This could trigger acceleration in the support cluster at 0.6993 – 0.6991.

Bullish scenario

A sustained move above 0.7182 will signal the presence of buyers. This could trigger a push towards .7212. Exceeding this level could trigger an upward acceleration with the resistance group at 0.7275 – 0.7277 the next target.

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