AUD/USD Plunges to New Yearly Lows On Increased Off-Risk Trading

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The AUD/USD currency pair on Friday plummeted to trade below the 1.7000 level, setting a new yearly low. The currency pair continues to trade within a descending channel formation after finding the trendline support. 

The currency pair has now fallen several levels below the 100-hour moving average amid increased off-risk trading. As a result, the pair declined to trade deep into the oversold conditions of the 14-hour RSI.

AUD/USD Fundamentals Overview

The AUD/USD currency pair is trading at the back of a relatively busy period in both markets. On Friday, the US non-farm payrolls of November missed the market forecast of 550k with 210k jobs. The market also delivered lower than expected (YoY) hourly wage growth of 4.8% versus 5%, in line with the October growth. However, the unemployment rate fell to 4.2% during the month, beating the forecasted rate of 4.5%, and down from the previous month’s rate of 4.6%. The US ISM Services PMI smashed the expectation of 65 with 69.1.

In Australia, the commonwealth bank services PMI for November outperformed the expectation of 55 with 55.7, while the AiG Performance of Construction Index edged slightly lower to 57, down from 57.6 in the previous month. Earlier in the week, Australia’s gross domestic product for Q3 beat the expected (QoQ) change of -2.7% with a change of -1.9%. The annualized GDP also outshone the (YoY) expectation of 3% with a change of 3.9%.

AUD/USD Technical Analysis (the 60-min Chart)

Technically, the AUD/USD currency pair seems to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.

Therefore, the bulls will be targeting short-term rebounds at about 0.7057, or higher at 0.7117. On the other hand, the bears will target extended declines at about 0.6928, or lower at 0.6865.

AUD/USD Technical Analysis (the Daily Chart)

In the daily chart, the AUD/USD currency pair seems to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.

Therefore, the bears will be looking to extend long-term declines towards 0.6795 or lower to 0.6600. On the other hand, the bulls will be targeting long-term profits at about 0.7215, or higher at 0.7400.

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