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AUD/USD Dropped Below Mid-0.6400s - Dollar Weakens Amid Jobless Claims!  


The AUD/USD currency pair failed to stop its previous 4-session losing streak and dropped just below mid-0.6400s, mainly due to the risk-off market sentiment, which keeps the risker assets, including Aussie dollar under pressure. The broad-based U.S. dollar strength also weighed on the currency pair and contributed to the currency pair earlier declines.

The AUD/USD is trading at 0.6429 and consolidated in the range between the 0.6421 and 0.6462. Federal Reserve Chair Jerome Powell showed disagreeability about the idea of the negative rate. He gave a very depressive statement about the economic downturn, which bolstered the demand of the U.S. dollar and contributed to the currency pair earlier declines. Besides, the Fed Chair Powell indicates that the on-going recession could be for the long-term if Congress fails to provide additional fiscal support.

The receding expectations about the sharp recovery of economic weighed on the investors' sentiment. The risk-off market sentiment fueled by multiple factors like the US-China trade war and the second wave of coronavirus weakened demand for the perceived riskier Australian dollar.

At the US-China front, the already escalated trade war between the United States and China got fueled further after U.S. President Trump recently blocked investments into the Chinese stocks. As in result, China fire shots by words on the United States, which eventually weighed on the market risk sentiment. Earlier in the morning, the Republican leader has denied renegotiation of the Phase 1 deal while alleging China for the virus outbreak.

At the data front, the reason for the currency pair declines could also be attributed to the Thursday's mixed Aussie employment figures, showing that the number of employed people declined more-than-expected, by 594.3K in April. Alternatively, the lower-than-expected rise in the unemployment rate helped limit deeper losses.

On the technical front, the AUD/USD pair is on a bearish run, having dropped below an immediate support level of 0.6432. Closing of candles below this level suggests odds of selling bias in Aussie. At the same time. The 50 EMA and RSI are also in support of the selling trend. But the closing of recent candles is rather mixed. Long shadows of candles are demonstrating the sort of indecision among traders, especially since the release of worse than expected U.S. Jobless Claims data. Let's look for selling trades below 0.6440 with a target around 0..6370. Alternatively, buying can also be seen around 0.6370 zones. All the best!

Source: https://www.eaglefx.com/news/aud-usd-dropped-below-mid-0-6400s-dollar-weakens-amid-jobless-claims/
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