AUDUSD has paused at 0.7300 after a strong two-week rally and is looking for another push to the September 1st highs at 0.7400. Tomorrow sees the release of employment data from the Aussie economy and this could provide the spark.
The market is looking for a -30k drop in employment and the unemployment rate is also expected to rise to 7.2%, which would be a steep 0.3% increase. If the numbers come in close to this prediction then AUD can hold onto recent gains. If we see a surprise to the upside then a move higher should test the resistance levels. Employment was a closely watched data set by the Reserve Bank of Australia earlier in the year before the virus hit but it will still guide policy.
The market may look beyond tomorrow’s numbers after the Aussie central bank slashed rates to 0.1% recently and embarked on bond-buying program in an effort to stimulate the economy.
The Aussie has benefited from a decline in the U.S. dollar after the recent election. Traders are pulling back on dollar investment until the picture becomes clearer but there is also the belief that a Biden Presidency would benefit foreign nations with less harsh trade terms. This has been a key reason for a surge in the Chinese Yuan and the Aussie economy would benefit from China’s prosperity. The two countries have just signed up to a new 15 nation trade pact between Asia-Pac heavyweights.
AUDUSD Technical Outlook
AUDUSD has rallied from support on November 1st to trade at 0.7300 and the pair is looking for a catalyst to get to the 0.7400 highs. A close below 0.7250 would suggest that the bull run is under threat in the Aussie. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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AUDUSD Daily Chart
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