AUD/USD short post payrolls pre RBA 7th May

OANDA:AUDUSD   Australian Dollar / U.S. Dollar
On our analysis on the 25.04 we identified a doji candle followed by an upward reversal but we saw this as profit taking on short positions and expected the currency pair to keep dropping. AUD/USD did effectively keep falling in particular due to the FOMC holding rates whilst being more optimistic about the economy than in the March's meeting minutes which should increase the probability of interest rate rises in the future. Payrolls beat expectations coming in at 263K vs 185K forecast with last month's revision adding another 16K but average hourly earnings came in at 3.2% vs 3.3% forecast leading to a positive reversal. However, we see AUDUSD continuing it's downtrend early next week due to the high expectations of a rate cut by the RBA to increase inflation and boost the housing market which is suffering a downturn. Therefore, we maintain our short position which we would look to add to if the currency pair moves towards the next key resistance level at around 0.7040.
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