AUD/USD remains depressed below 0.7350 ahead of US ADP employment data
- AUD/USD fell sharply after disappointing GDP data on Wednesday.
- Broad-based USD strength keeps bearish pressure on AUD/USD intact.
- US' private sector is expected to add 950K jobs in August.
The AUD/USD pair came under heavy selling pressure during the Asian session on Wednesday as the disappointing growth data from Australia weighed on the AUD. Although the risk-on market environment helped the pair recover a small portion of its losses, the broad-based USD strength kept the upside capped. As of writing, AUD/USD was down 0.36% on a daily basis at 0.7344.
Australian economy shrinks at a stronger pace than expected
Earlier in the day, the Australian Bureau of Statistics reported that the Australian economy contracted by 7% on a quarterly basis in the second quarter. This reading came in worse than the market expectation for a decline of 6% and triggered an AUD selloff.
On the other hand, the US Dollar Index (DXY), which staged a late rebound and closed in the positive territory on Tuesday, extended its recovery and was last seen gaining 0.3% on the day at 92.58.
The ADP Employment Change data will highlight the US economic calendar on Wednesday. Analysts expect employment in the private sector to rise by 950,000 jobs in August. A better-than-expected reading could help the DXY edge higher and cause AUD/USD to push lower. Additionally, NY Fed President John Williams and Cleveland Fed President Loretta Mester will be delivering speeches during the American session.
On Thursday, Commonwealth Bank Services PMI and Trade Balance data will be featured in the Australian economic docket.
Technical levels to watch for