AUD/USD: down in the commodity dumps, headed to or beyond 0.7375 on nonfarm payrolls?

Currently, AUD/USD is trading at 0.7413, up 0.05% on the day, having posted a daily high at 0.7416 and low at 0.7407.

• Forex today: CAD lower lead by drop in WTI, US dollar on its knees and euro takes off

AUD/USD has been weighed today by lower key metal prices and oil, both iron ore and WTI down about 5%. The Aussie has been unable to recover more than 33 pips from the lowest levels since 10th Jan earlier this year. The dollar, albeit slightly out of favour in recent trade, is supported on the FOMC expected to hike in June with little doubt in the market's minds about it. 

Today's nonfarm payrolls could be the nail in the coffin for the Aussie if the ADP report was anything to go by, a potentially positive prelude to what the government figures will show us. Analysts at Nomura have predicted that nonfarm payrolls will have increased by 185k (Consensus: 190k) in April and private payrolls to have increased by 180k (Consensus: 188k), implying a 5k gain in government jobs. "Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors."

However, before then, we have the RBA's Statement on Monetary Policy where growth and inflation forecasts are expected to be largely unchanged with an ongoing emphasis on housing risks to remain a key theme, explained analysts at Westpac.

AUD/USD levels

While noting support levels are  0.7375, 0.7330 and 0.7290 and resistance levels are  0.7445, 0.7490 and 0.7530, Valeria Bednarik, chief analysts at FXStreet also explained that the pair reached extremely oversold conditions after falling for a second consecutive day, "with intraday technical readings far from suggesting an end to the ongoing decline, as in the 4 hours chart, the 20 SMA turned sharply lower above the current level, whilst technical indicators are now consolidating within the oversold territory."