The Australian dollar fell to fresh lows at 0.8309, the pair’s lowest since June 2010, against the strong U.S dollar during last weeks trading session. This was fueled by Wednesday’s disappointing data which showed that Australia’s economy expanded 0.3% in the third quarter, below expectations for a gain of 0.7%. Year-on-year, gross domestic product rose 2.7%, compared to expectations for an expansion of 3.1%.
Meanwhile on Friday, data showed that the U.S. economy added much more jobs than expected last month, underlining the view that the Federal Reserve will move closer to raising interest rates. The U.S. dollar rallied after the Department of Labor said that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
October’s figure was revised up to 243,000 from a previously reported 214,000, while the unemployment rate remained unchanged at a six-year low of 5.8%.
The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.
Weekly bias remains bearish as 21 and 55 EMA is crossed downward for more selling as the 4 hours, daily, weekly and monthly time-frame are synchronized for a continuation of the current strong downtrend. SSRC, MACD and RSI oscillators are also showing bearish momentum is intact in the pair. More decline to 0.80660 supports e is expected in the long term picture.
Key economic reports to watch out for in the week ahead is the Australian Employment Change/Unemployment rate, U.S Retail Sales and Prelim UoM Consumer Sentiment.