AUDUSD under pressure ahead of key jobs data

A new downtrend may be in play: Chart

Downtrend 3

The US Dollar was bearish against most of its major pairs on Wednesday with the exception of the CAD. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications slipped 0.7% for the week ending October 9th, compared to +4.6% in the prior week. Finally, the Producer Price Index Final Demand increased 0.4% on month in September (+0.2% expected), compared to +0.3% in August.   

On Thursday, Empire Manufacturing for October is expected to fall to 14.0 on month, from 17.0 in September. Initial Jobless Claims for the week ending October 10th are expected to decline to 825K, from 840K in the week before. Finally, Continuing Claims for the week ending October 3rd are expected to sink to 10,550K, from 10,976K in the previous week.       

The Euro was bearish against most of its major pairs with the exception of the CAD. In Europe, The European Commission has reported August industrial production at +0.7% (vs +0.8% on month expected).

The Australian dollar was bearish against most of its major pairs with the exception of the CAD and USD. On Thursday, we can expect some key employment data to be released. The employment change in Sept is anticipated to decline 40K from a gain of 111K in Aug. Full Time employment is anticipated to decline by 10K from a gain in 36.2K previous. The Australian unemployment rate is expected to rise to 7% in Sept from 6.8 prior. Part time employment may drop by 30K in Sept from a gain of 74.8K prior. 

With the anticipated drop in employment, the AUDUSD has signaled its recent uptrend has come to an end. The pair confirmed a bearish cross after the 20-day crossed back below the 50-day moving average. The uptrend that started with the bullish crossover of the moving averages at the end of April lasted approximately 110 trading days with a gain of around 14 percent. Key resistance can be seen at the 0.725 area with a preference to the downside to reach 0.7025 support and ultimately 0.692 in extension. 

Source: GAIN Capital, TradingView

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