AUD/USD On the Verge of Breaking Below 0.7200 After ADP Report
Extending its reversal from the very important 200-day SMA, the AUD/USD pair has now dropped to session low after the release of ADP report on the US private sector employment.
The ADP report show US economy added 173k new private-sector jobs during the month of May. The reading was broadly in-line with consensus estimates of 174k new jobs. Later during the session, trader would turn their attention to speeches by FOMC’s Kaplan, Dudley and Powell.
The pair's earlier attempt, during Asian session, to move back above 200-day SMA got sold into as better-than-expected drop in Australian trade deficit got negated by weaker monthly retail sales growth.
Moreover, the pair is also bearing the pair of global risk-aversion, which has been denting demand for commodity-linked currencies, like AUD.
Technical levels to watch
Weakness below 0.7200 round figure mark, and a subsequent drop below 0.7180, is likely to increase the pair's vulnerability to resume its near-term downward trajectory and extend the depreciating move back towards nearly 3-month lows support near 0.7150-45 zone.
Meanwhile on the upside, 200-day SMA near 0.7255 region might continue to act as immediate strong resistance, above which the pair seems all set to extend its recovery beyond 0.7300 handle, towards testing its next major resistance near 0.7320-25 area.