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• Growing US-China trade tensions prompts some fresh selling on Friday.
• Upbeat NFP lifts USD and further accelerates the downward momentum.
• Highly oversold conditions do little to stall the ongoing bearish slide.
The AUD/USD pair remained heavily offered through the early North-American session and dropped to 30-month lows post-NFP, albeit recovered few pips thereafter.
Anxiousness over the new US tariffs on around $200 billion worth of Chinese imports, expected to be announced as early as today, was seen as one of the key factors exerting some fresh downward pressure on the China-proxy Australian Dollar.
The downward pressure aggravated further after the latest US monthly jobs report showed that the US economy added 201K new jobs in August, much better than a downwardly revised figure of 147K in July and also better than consensus estimates pointing to a reading of 191K.
Adding to this, average hourly earnings recorded a strong m/m growth of 0.4%, lifting the yearly rate to 2.9% as compared to 2.7% anticipated, and largely offset a slight disappointment from the unemployment rate, which held stable at 3.9% as against market expectations for a downtick to 3.8%.
Apart from upbeat monthly employment details, the prevalent risk-off mood was further seen benefitting the US Dollar‘s safe-haven status, against the perceived riskier currencies – like the Aussie, and further collaborated to the pair’s decline to its lowest level since early-March 2016.
It would now be interesting to see if the pair is able to find any support at lower levels or continues with its well-established bearish trend, amid mounting global trade war fears and despite near-term oversold conditions.
Technical levels to watch
A follow-through selling has the potential to continue dragging the pair further towards the 0.7110-0.7100 region, which if broken is likely to accelerate the downfall towards 0.7070 support zone.
On the flip side, any meaningful recovery attempt might now confront fresh supply near the 0.7170-75 region and is closely followed by the 0.7200 handle and the 0.7215-20 supply zone.