- AUD/USD is fluctuating in a relatively narrow range on Wednesday.
- US Dollar Index struggles to stage a decisive rebound following earlier decline.
- Focus shifts to Australian jobs report for August.
After closing in the negative territory on Tuesday, the AUD/USD pair edged lower in the Asian session on Wednesday and touched its weakest level in two weeks at 0.7302. In the second half of the day, the pair reversed its direction and was last seen gaining 0.2% on the day at 0.7332. Nevertheless, the pair looks poised to continue to trade in a tight channel ahead of the August jobs report from Australia.
DXY remains on the back foot
The modest selling pressure surrounding the greenback seems to be allowing AUD/USD to stay in the positive territory during the American trading hours. As of writing, the US Dollar Index (DXY) was down 0.2% on the day at 92.48.
Earlier in the session, the data from the US showed that the NY Empire State Manufacturing Index rose to 34.3 in September from 18.3 in August. Additionally, the US Federal Reserve announced that Industrial Production expanded by 0.5% on a monthly basis in August, compared to the market expectation of 0.4%.
In the meantime, the modest recovery witnessed in the benchmark 10-year US Treasury bond yield and the mixed performance of Wall Street’s main indexes help the USD limit its losses for the time being.
The Australian Bureau of Statistics is expected to report that the Unemployment Rate rose to 4.9% in July from 4.6% in June with the Employment Change arriving at -70K. A disappointing labour market report is likely to force AUD/USD to turn south and vice versa.
Australian Employment Preview: AUD to remain under pressure on weak August jobs report.
Technical levels to watch for