The Australian dollar stands at the back foot in European session on Wednesday, following repeated failure at key barriers at 0.7035/36 (daily cloud top/base of thick weekly cloud), as Tuesday’s action stalled at 0.7044, ticks below previous rejection of 4 July at 0.7047.
Bids from psychological 0.70 support keep for now the price above this level, but risk of deeper pullback exists, as Tuesday’s close completed bearish outside day pattern which generated negative signal.
Momentum on daily chart is heading south and is about to break into negative territory and stochastic is emerging from overbought territory that supports bearish scenario.
Clear break below 0.70 zone (also Fibo 38.2% of 0.6910/0.7044 upleg) would risk deeper pullback and generate initial signal of double-top formation (0.7047/44).
Australian jobs data are due early Thursday and could provide fresh signals.
Forecast shows 9.1K new jobs created in June, compared 42.3K in May that could have negative impact on Aussie and spark fresh weakness if release comes in line or below expectations.
Conversely, upbeat results could inflate the pair for renewed attempt at recent peaks at 0.7044/47, violation of which would generate bullish signal for extension towards 200DMA (0.7090).
Res: 0.7020, 0.7035, 0.7047, 0.7090
Sup: 0.7000, 0.6983, 0.6961, 0.6942
