The AUD/USD is trading nearly flat as investors await the release on Friday’s U.S. Non-Farm Payrolls report at 1230 GMT. Earlier today, the Australian Dollar showed little reaction to the AIG Construction Index which came in at 56.0, slightly below last month’s 56.7 read.
The headline number of the NFP report is expected to show the economy added 175K new jobs in June. Some traders are looking for an even lower figure given Thursday’s disappointing ADP report. The unemployment rate is expected to remain at 4.3% and Average Hourly Earnings are expected to show a slightly increase from 0.2% to 0.3%.
Late in the session, the U.S. Federal Reserve will release its semi-annual monetary policy report to Congress at 1900 GMT. This will precede next week’s testimony by Chairwoman Janet Yellen.
Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the June 30 top at .7712. A trade through .7571 will signal a resumption of the selling. A trade through .7712 will turn the main trend to up.
The main range is .7372 to .7712. Its retracement zone at .7542 to .7502 is the primary downside target.
Forecast
Based on the current price at .7586, the nearest upside target is a downtrending angle at .7612 and this week’s low at .7571. The price action suggests investor indecision and impending volatility.
If the NFP is weaker-than-expected then look for a rally into .7612. Overtaking this angle could drive the market into a long-term uptrending angle at .7622. Crossing to the strong side of this angle could create the upside momentum needed to extend the rally into the downtrending angle at .7662.
If the NFP is stronger-than-expected then look for sellers to take out .7571. This could create the downside momentum needed to challenge the 50% level at .7542.
Since the main trend is up, we could see a technical bounce on the first test of .7542. If this level fails then look for a possible acceleration into the Fibonacci level at .7502 and an uptrending angle at .7497.
Look for volatility with the release of the NFP at 1230 GMT.
This article was originally posted on FX Empire