AUD/USD Trying to Pare Losses after Balance of Factors Shifted in Favor of Australian Economy

This week the Australian dollar initially tried to rally on Monday, October 2, but then reversed quite drastically. The market then broke down below the 0.64 level, considered to have been an important support level lately.

Now AUD/USD is trying to pare losses after the U.S. ISM Services PMI fell along with services employment data (indicating the upcoming Nonfarm Payrolls data might not be as bad as predicted). U.S. ADP payrolls change complemented this trend by missing expectations. However, ADP numbers haven't been a reliable predictor of Nonfarm Payrolls numbers going forward.

Anyway, Australia's trade balance surprised on the upside this morning, October 5th, but remained below recent averages indicating, overall, net gain for the Aussie. The focus in the day ahead remain tilted towards the U.S.-specific factors, including employment data on further jobless claims, which is expected to be released after the ADP data. If that happens, U.S. Treasury yields could drop further, benefiting the growth-and-commodities-backed currencies and boosting Australian dollar, among other lookalikes.