AUDUSD is on the back foot among the majors in today’s Asian session following the disappointing Australian labor figures. As of this writing, the currency pair is down by 0.29% from its opening price as it trades at 0.6436.
Earlier today, the Australian Bureau of Statistics reported that 594,300 people lost jobs in April. Not only was this more than the forecast which was at 575,000, the reading for March was also revised lower. Initially, it was reported that 5,900 people found jobs, but today, it was updated to reveal that only 700 people did.
At first glance, the unemployment rate seemed like a sight for optimism when it came in at 6.2% versus the 8.3% forecast. However, a closer look at the report reveals that this is mostly because the participation rate was at its lowest level in 15 years. This is important because people who are not actively looking for work are not included when measuring the unemployment rate. It could imply that Australians could be feeling hopeless in finding jobs amid the pandemic.
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AUDUSD Outlook
On the 4-hour time frame, it can be seen that AUDUSD is testing support at the 100 SMA and rising trendline (from connecting the lows of April 21 and May 7). A couple of reversal candlesticks have already formed as hammers. When you attend our free forex trading course, you will learn that this candlestick pattern is often considered as a bullish confirmation signal. And so, they may signal a potential rally soon on AUDUSD to its May 11 highs at 0.6560.
On the other hand, it’s worth noting that the current 4-hour candle still has not yet closed. If it finishes below today’s low around 0.6415, it could mean that sellers are dominating trading. AUDUSD could then trade lower to near-term support around 0.6330 where the 200 SMA is.
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