It’s been a week of economic obstacles for the Australian dollar bulls, including the Reserve Bank of Australia 50-basis point interest rate hike, as traders are awaiting Friday’s July U.S. jobs report, which will give the latest snapshot on the labour market and the health of the economy.
Earlier, the Reserve Bank of Australia (RBA) released its quarterly Statement on Monetary Policy.
In the statement, the (RBA) restated its forecast for annual inflation to reach 7.75 per cent at the end of this year and a little more than 4 per cent by the end of 2023.
The (RBA) has also cut its jobless rate forecast to 3.25 per cent for the December quarter, from the 3.75 per cent expected in May. Earlier this week, the (RBA) raised rates by half a percentage (50 basis points) from 1.35% to 1.85%.
Later Friday, the U.S. Labour Department’s jobs report is expected to show whether employers kept hiring in July after 372,000 jobs were added in June, with the forecast currently holding at 250,000, and the unemployment rate is expected to hold steady at a historic low of 3.6%.
Based on the daily technical assessment, the Relative Strength Index (RSI) 3-day ‘lookback’ indicator is positive/mixed, while the Moving Average Convergence Divergence (MACD) oscillator supports a weak positive signal. The ADX indicator supports a ranging market.
With the topside connecting near the 0.6995 target in the overnight session, it is assessed a clearance here would reopen the 0.7060-65 objective.
Conversely, although 0.6870-75 is expected to guard against any bearish threat, a close beneath this level would expose the region to 0.6775.