Aussie set for further correction

FX:AUDUSD   Australian Dollar / U.S. Dollar
The AUDUSD pair extended its slide and touched a one-week low at 0.7987 on Thursday. Aussie is trading in bearish mode for the fourth consecutive day, sticking to the key 0.80 psychological support. The economic data from Australia is not supportive for the currency these days – weak CPI report has disappointed the bulls and triggered a more aggressive technical correction from highs above 1.81.
Meanwhile, the bearish pressure on US dollar has eased a bit on the back of FOMC’s “hawkish” tone yesterday. The Central bank highlighted solid economic growth and recent pickup in inflation . Renewed rise in the US Treasury bond yields provided an additional negative boost to aussie as a higher-yielding currency.
In the short-term, AUDUSD may fail to preserve the 0.80 mark if the greenback manages to stage a local recovery. Tomorrow’s release of January Non-Farm Payrolls is likely to be the next catalyst for dollar pairs, including aussie. The ADP numbers were impressive: private-sector employment increased by 234,000, well above expectations for 185,000. Should the key figures on Friday also reflect strong job creation and wage growth, the greenback may partially retrace its losses across the market and send the Australian counterpart more decisively under 0.80, with the immediate support at 0.7965.
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