AUD/USD: consolidates and awaiting nonfarm payrolls

AUD/USD is consolidating at the 0.7580 level in a strong downtrend from just below the 0.77 handle as we await the nonfarm payrolls event as main scheduled catalyst to close off the week.

For today, we had the Australian data with construction PMI September that came at 51.4 and previous 46.6.Australia also raised the 2016 iron ore price forecast by 10% and adduces strong Chinese demand (forecasts $48.50/t 2016, $44.80/t 2017). Meanwhile, today’s big highlight comes in the US payrolls report for September. The median estimate is 172k with an unchanged unemployment rate of 4.9%. We will also have a number  of Fed-speakers from Fischer, Mester, George and Brainard.

Nonfarm Payrolls Preview: US economy getting closer to full employment

AUD/USD 1-3 month outlook: While further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there’s a case for a correction towards 0.74 if the Fed tightens in December as we expect. (13 Sep)

AUD/USD levels

Analysts at Westpac offered for AUD/USD a 1 day outlook:  "Daily momentum has flipped to negative and 0.7535 is the next (minor) target. That said, tonight’s US payrolls could easily deliver a surprise either way."

Meanwhile, with spot trading at 0.7581, we can see next resistance ahead at 0.7585 (Weekly Low), 0.7585 (Daily Open), 0.7588 (Hourly 20 EMA), 0.7590 (Daily High) and 0.7594 (Daily Classic S1). Support below can be found at 0.7580 (Daily Low), 0.7567 (Daily Classic S2), 0.7562 (Yesterday's Low), 0.7540 (Daily Classic S3) and 0.7533 (Weekly Classic S2).