The AUD/USD currency pair pulled back on Friday to trade at around 0.6850 amid reports that the US and China had reached a trade agreement. The currency pair has been trading within a slightly descending wedge since the start of the month and on Friday plunged to a new 9-day low amid increasing bearish pressure.
The pair is now on the edge of dropping to oversold levels of the RSI indicator and trades several levels below the 100-hour and the 200-hour SMA lines in the 60-min chart.
AUD/USD Fundamentals Overview
The AUD/USD currency pair is trading at the back of a busy week in the US markets. On Wednesday, the ISM non-Manufacturing PMI beat expectations of 53.5 with 54.7. In the preceding day, the ISM NY-Business Conditions Index beat 45.8 with 47.7.
The US Markit Services and Composite PMIs missed expectations as did the JOLTS Jobs Openings for September coming in at 7.024M versus 7.028M. The Preliminary nonfarm Productivity for Q3 also missed after posting a change of -0.3% versus an expectation of 0.9% while Unite Labor Costs surged 3.6% beating the expectation of 2.2%.
On Thursday, Continuing Jobless Claims slightly missed the expectation of 1.683M with 1.689M while the Initial Claims outperformed 215K with 211k. And on Friday, Wholesale inventories for September posted a change of -0.4% beating the expected change of -0.3%.
AUD/USD Technical Analysis (the 60-min Chart)
Technically, the AUD/USD currency pair continues to trade in a descending channel, which indicates a short-term bearish bias. The pair has recently dropped to oversold levels and is now closer to retesting the trendline support, which could trigger the next rebound.
Therefore, bulls will be targeting short-term rebound profits at around 0.6873 or higher at around 0.6886. On the other hand, the bears will be looking to pounce on profits at around 0.6839 or lower at 0.6818 going into next week.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair appears to have recently made a bullish reversal after bottoming at around 0.6700. The pair has recently bounced off overbought levels following the latest pullback and this creates opportunities for both the bulls and the bears.
Therefore, the bulls will be targeting long-term profits at around 0.6927 or higher at 0.7010. On the other hand, the bears will be looking to pounce for pullback profits at around 0.6789 or lower at 0.6711.