Roller-coaster ride for the Australian Dollar opening one cent lower

Daily Currency Update

The Australian Dollar spent most of Fridays local session above 72c when valued against the US Dollar aided by positive AiG Services Index which climbed to 44.00 in July compared to 31.5 in June. Having rallied more than 1.5 cents earlier on in the week and touching a 16-month high of 0.7243 on Friday morning, the pair witnessed a sell-off as Gold posted its biggest daily decline in two months and the release of US Non-Farm Payrolls beat expectations causing the Aussie to relinquish much of the gains made last week, touching an eventual low of 0.7145.
Locally, we also saw the release of the RBA’s monthly Monetary Policy Statement where it said the RBA expects GDP to fall 3% in 2020 followed by a likely 6% rise in 2021. However, citing lock-downs in the country could fuel a longer economic recovery and push unemployment into next year with an unknown timeline of when a COVID-19 vaccine will be available. It is unlikely the RBA will change its current stance on the cash rate keeping it at record lows of 0.25%
On the data front, there are no scheduled releases today. Tuesday we have NAB Business Confidence for July and Wednesday’s Westpac’s Consumer Confidence Index, both will be watched by investors to understand the currency view on sentiment under the COVID-19 crisis. Thursday the all-important labour force report for July is issued. The unemployment rate is expected to rise to 7.9% from 7.4% due to a higher workforce participation rate despite an expected 50,000 jobs being created. Finally, on Friday The RBA Governor appears before the House of Representatives' Standing Committee. From a technical perspective the AUD/USD opens this morning at 0.7155, we can expect to see initial support at 0.7080 and 0.7060 on the downside. Resistance sits at 0.7270.