AUD/USD is trading higher after mixed Australian job numbers. In Tuesday’s RBA meeting minutes, the Australian central bank noted that unemployment and wage growth numbers are key drivers of the targeted rise in inflation. Monitoring these factors will form the basis of their decision on 6th July on whether it should extend its $80 billion QE program upon its expiry in September. The bank is targeting an unemployment rate of 4%.
According to the Australian Bureau of Statistics, unemployment rate in the country was at 5.5% in April compared to the expected 5.6%. However, the employment change reading missed the estimates by coming in at -30.6k compared to the forecasted 15.0k. The figure is also significantly lower from 70.7k in March.
Later in the day, AUD/USD will be reacting to the US initial jobless claims data. The predicted 450k is lower than the prior week’s 473k.
AUDUSD Technical Outlook
AUD/USD is up by 0.14% at 0.7737 as it tries to recoup some of the losses from the previous session. However, on a 4-hour chart, it is still below the five and ten-week exponential moving averages. The formation of a head-and-shoulder pattern signals that the currency pair may record further losses.
Notably, it has been range-bound between 0.7676 and 0.7816 for over a week now. I expect AUD/USD to drop to the horizontal channel’s lower border at 0.7676. It may drop further to 0.7650 before moving back up to the lower border. However, a move above 0.7764 will invalidate the thesis.