AUD/USD is testing a major support level, as seen on its daily time frame. The pair has previously bounced off the .8850 to .8900 area in the past but has formed a bearish flag right on that area.
Data from China and Australia have mostly been weaker than expected while RBA Governor Stevens continues to express his preference for a weaker Australian dollar. The event risk for today is the NFP release, which might be positive for the US dollar if it comes in strong.
If that’s the case, AUD/USD might make a strong break below support and trade to the next support area around .8600, which is Stevens’ ideal level for the pair. However, a weak figure might trigger a quick bounce, possibly until the near term resistance around .9150.
By Kate Curtis from Trader’s Way