AUD/USD : Lunar New Year
(Fri, 12 Feb 2021). Wall Street saw a mixed trading day on Thursday after initial jobless claims data revealed the US labor market continues to struggle despite recent improvements seen in Covid case figures across the country. The tech-heavy Nasdaq Composite gained 0.38% while the S&P 500 and Dow Jones Industrial Average traded nearly flat, closing at +0.17% and -0.02%, respectively.
Markets are taking a step back after a strong start to the month as investors evaluate economic conditions and the broader recovery amid the ongoing pandemic. Initial jobless claims for the week ending February 6 crossed the wires at 793k, slightly above the forecasted 757k figure, according to the DailyFX Economic Calendar. While the recovery in the US labor market is less than stellar, the four-week average continues to see marginal improvements as vaccination rates increase.
Elsewhere, the US Dollar weakened further as the DXY index dropped below 90.4. Treasuries also moved lower, particularly long-dated tenures. These pushed yields higher and steepened the curve after Chair Jerome Powell reinforced the Fed’s stance to remain in an accommodative posture until the labor market sees substantial improvements.
AUD/USD TECHNICAL OUTLOOK
AUD/USD’s recent strength has seen prices pierce through a previously formed Symmetrical Triangle pattern after a bearish selloff formed after prices broke below that triangle’s lower bound. Now, the pair is approaching its January multi-year high. The 78.6% Fibonacci retracement from the January – February move appears to offer the most immediate overhead obstacle.
Momentum appears poised to guide prices higher in the near-term, with the MACD line making a bullish cross above its signal line. If prices manage to climb over the 78.6% Fib level, the 0.7800 psychological level will move into focus before attempting to take out recent highs. To the downside, the 61.8% Fib level along with the triangle’s upper bound may offer support.
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