Today, all investors were expecting the important employment data, coming from Australia, which was expected to provide them with further clues about the strength of the economy. The data release was very disappointing as the employment change decreased instead of increasing as analysts were expecting. Economists were projecting a modest change of 0.2K on the upside and they were surprised to see the employment decrease by 27K people. To make the matters worse, the number for the previous month was significantly revised on the downside – from 38.9K to 27.8K. The unemployment rate, however, remained at the current level of 5.2%, just as analysts were expecting. The inflation expectations of the consumers also picked up, reaching levels not seen since April. According to a survey, conducted by Melbourne Institute, inflation is expected to rise by 3.3% for the next twelve months, a reading significantly higher than the 2.3% number we saw last month. How did the Aussie react to all these data? The high-yielder dropped significantly, pushing below both its 25-period and its 50-period moving averages. The AUD/USD even traded below the key 1.0100 level for a while, but later on it managed to pare some of its losses and is currently trading at 1.0130. Support in the Aussie is provided by the 200-period moving average, which is standing at 1.00384. Resistance, on the other hand, is provided by the lows we reached at the beginning of the week around 1.0162. Oscillators are all trending lower with the relative strength index close to the lower band of its range, standing at 36, while the stochastic has just entered oversold territory, standing at 13. The MACD is a whisker below the key 0 level, which it penetrated several hours ago.
Traders, who intend to trade the Aussie, should bear in mind that the AUD/USD is susceptible to developments, which does not necessarily pertain to the Australian economy. As investors are more and more focusing their attention on lower-yielding assets and are shedding their holdings in riskier ones, it should come as no surprise that high-yielding currencies respond little to positive news and are extensively sold on bad ones. On the economic front, this week has no more significant announcements to offer for the Australian economy. Traders, however, will be focusing on the GDP numbers for the Chinese economy, which are scheduled to be released tomorrow. Analysts are projecting that we will see the slowest growth in the second largest economy in the world in a four years’ time. If the numbers come in worse than what market participants are expecting, we will probably see additional selling of risky assets, including currencies. More news will be coming from the USA, where PPI numbers and consumer sentiment figures are released.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.