- AUD/USD trades higher due to upbeat Australia’s Private Capital Expenditure.
- 23.6% Fibonacci retracement appears to be a barrier following the three-week high at 0.6522.
- MACD indicates improvement in the recent momentum but the pair remains bearish as long as stays below the 50-day SMA.
AUD/USD retraces from the previous day’s losses, trading higher around 0.6480 at the time of writing during the Asian session on Thursday. The pair is experiencing upward support due to the downbeat US Treasury yields and disappointing US economic data.
— TRADIE2TRADER (@AndrewT32683646) August 31, 2023
Additionally, Australia’s upbeat Private Capital Expenditure (Q2) was released on Thursday, contributing support to the AUD/USD pair. The data reported that capital expenditure intentions improved to 2.8%, better than the expected 1.2% figure and 2.4% prior.
The first barrier to overcome is the 0.6500 psychological level, which is followed by the 23.6% Fibonacci retracement at 0.6488. If the latter is decisively broken above, the AUD/USD pair may move on to test the region near the three-week high at 0.6522 and the 38.2% Fibonacci retracement at 0.6565.
Key technical levels to watch for today
— Syam KP | Gulf Brokers (@syamkp1) August 31, 2023
On the downside, the pair could meet the key support around the 21-day Simple Moving Average (SMA) at 0.6474, followed by the nine-day SMA at 0.6445. A break below that level could put pressure on the AUD/USD pair to navigate the region around the 0.6400 psychological level.
The 14-day Relative Strength Index (RSI) is still below 50, indicating that AUD/USD traders continue to have a negative bias. The Moving Average Convergence Divergence (MACD) line shows a divergence above the signal line even if it is still below the centerline. This gap suggests that recent momentum has improved.
🇺🇸US Treasury Securities
UST 2Y YTM:
4.90% (+3 bp)
UST 5Y YTM:
4.27% (+1 bp)
UST 10Y YTM:
4.12% (0 bp)
UST 30Y YTM:
4.23% (0 bp)
Private payroll data from ADP showed employers added 177,000 jobs in August, which was lower than a Dow Jones forecast of 200,000, pic.twitter.com/UmitHDdCVN
— @Cbonds_Global (@Cbonds_Global) August 31, 2023
In the short term, the underlying trend exhibits a bearish outlook as long as the AUD/USD pair stays below the 50-day EMA at 0.6610.