The dollar has reached multi month high against Aussie dollar. The jobs report is due at 12:30 GMT and is forecast to show a solid rise of 700,000. But there is chatter about the number coming in higher and the risk that upsets the assumption that U.S. interest rates can stay at rock-bottom levels for years. The dollar has climbed this week and hit its highest since March 2020 on Friday, as investors have re-assessed short dollar positions following months of strong data and a hawkish shift in tone from the Federal Reserve.

Also there is some nervousness whether the dollar’s going to start to behave in a more pro-cyclical manner, that is, if the data is stronger than expected in the U.S. that the dollar really gets more strength from that. The U.S. dollar index =USD was steady at 92.549 in Asia, having gained 0.8% over the week so far and moves elsewhere were slight as markets await the U.S. data. The dollar index is now up 3.4% from its May lows as shorts have cut their positions, and some say that move leaves it vulnerable if the jobs figures miss lofty expectations.

On the other hand Australian dollar had a dip today. One of the main reasons why the Australian dollar may have bounced just a bit is the fact that the jobs number comes out on Friday, so it more or less is probably going to be a scenario where the market is simply trying to get flat ahead of that position. 

Australia’s benchmark index is set to fall 0.2% this week as the country battles the highly contagious Delta variant in three state capital cities, with nearly half of all Australians under strict stay-at-home orders. Australia’s corporate regulator said Westpac expects to pay A$87 million ($64.96 million) to former customers of its advice business who were not given important updates on companies that they held shares in.

There is the problem with the Australians locking people down again, which of course does nothing good for the economy. Beyond that, the Federal Reserve may have to start tightening much quicker than many of the other central banks around the world, and if that is the case it will continue to favor the greenback.

AUD/USD 4 Hour Chart:

Support: 0.7451 (S1), 0.7431 (S2), 0.7403 (S3).

Resistance: 0.7498 (R1), 0.7526 (R2), 0.7546 (R3).

Amidst this optimistic news of U.S. Data favors greenback. We expect a bearish trend for AUDUSD.