AUDUSD is trending lower on its 4-hour time frame and is testing the top of the descending channel.

If this holds as resistance, price could fall back to support at the bottom of the channel around the .7650 minor psychological support.

The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse. The 200 SMA lines up with the top of the channel to add to its strength as resistance.

Stochastic is moving up to show that buying pressure is present but the oscillator is also in the overbought zone to signal that buyers are getting exhausted. If sellers are able to take over, the downtrend could resume.

Economic data from Australia came in mostly weaker than expected in the previous week. Both the current account balance and retail sales reports printed lower readings while the GDP was also a miss. The RBA refrained from making any changes to interest rates as well.

Meanwhile, US jobs data turned out stronger than expected at a gain of 313K versus the consensus at 205K. The earlier figure also enjoyed an upgrade from 200K to 239K while the unemployment rate was unchanged at 4.1%. Average hourly earnings also fell short with a 0.1% uptick versus the estimated 0.2% gain and the earlier 0.3% increase.

US CPI, PPI, and retail sales figures are all up for release this week and stronger than expected results could prop the dollar higher. There’s not much in the way of major reports from Australia, although China’s data dump on Tuesday’s Asian session could have a significant impact on AUD price action.

By Kate Curtis from Trader’s Way