AUD/USD: improved risk mood supporting AUD, for now

Currently, AUD/USD is trading at 0.7913, down -0.33% on the day, having posted a daily high at 0.7953 and low at 0.7898.

 Improved risk appetite and USD weakness supporting AUD/USD to test this month's highs.

Yellen at Jackson Hole: No update on the outlook – Nomura

However, with respect to the global trade of which the Aussie is very much sensitive to, Yellen and Draghi both sent messages to President Trump. "Winding back financial sector regulation, killing NAFTA, generally leaning against the tide of free trade; all of these could undermine the delicate balance of a recovery which has delivered growth in employment and GDP but not, yet, a recovery in productivity or in incomes on a sufficient scale," explained Kit Juckes, economist at Societe Generale. 

Meanwhile the calendar is light this week domestically for the Aussie and instead heads turn towards the nonfarm payrolls at the end of the week on Friday. However, analysts at Brown Brothers Harriman explained that the headline non-farm payroll number that is typically the focus is less important now, barring a significant surprise. 

"Jobs growth has been notable steady.  In 2016, the US created 187k jobs a month on average.  This year the average is 184k.  In the past three months, US job growth accelerated a bit (average 195k), and a reversion to the mean, which is what the median forecast anticipates (180k) is neither here nor there.  The point is that job growth remains impressive given the maturity of the business cycle," explained the analysts. 

AUD/USD levels

AUD/USD is testing the mid-August high at 0.7963 and the July 20 high at 0.7991 is back in focus. "While the 0.7980/91 July 20 and August 4 highs cap, however, downside pressure should be maintained. Below the 0.7862/08 current August low and support line lies good support at 0.7790/41," explained analysts at Commerzbank.