Just like most major currency pairs, AUDUSD lost ground to the US dollar in yesterday’s trading after the US NFP report for June topped expectations. However, before the currency pair traded lower, it did rally to a one-week high at 0.6951. Technicals show that it may have just broken resistance at the top of the triangle when it did so too.
As reported by my colleague Eno Eteng yesterday, the US jobs report for June showed that there were more jobs added to the economy than expected. The actual reading printed at 4.8 million which was higher than the 3.037 million forecast. Additionally, the reading for May was upwardly revised to 2.699 million versus its initial reading of 2.509 million. With this, the unemployment rate was at 11.1%. This reading is lower than both the forecast at 12.4% and the reading for May at 13.3%.
The only sore sports for the US labor market were the average hourly earnings for June and last week’s unemployment claims. Data showed that workers saw a 1.2% drop in their hourly wages which was more than the 0.8% consensus. Meanwhile, jobless claims clocked in at 1.427 million last week and topped estimates which were for a 1.350 million reading.
Regardless, market participants welcomed the stellar job growth posted by the US economy last month. This was especially made more significant by the fact that there were skepticisms in the NFP report for May.
Today, Australia reported positive retail sales numbers for May. Consumer spending for the month was at 16.9% and was higher than the 16.3% estimate.
On the 4-hour time frame, it can be seen that AUDUSD is seemingly trading above the resistance of the triangle I pointed out yesterday. This could be interpreted as a sign that buyers are dominating market sentiment. If this assumption turns out to be true, we may just soon see AUDUSD rally to its near-term resistance at 0.6974 where it peaked on June 23.
However, a close below yesterday’s New York session low at 0.6900 may mean that the recent price action we are seeing on AUDUSD is nothing more than just a fakeout. It could mean that sellers continue to dominate the market and that the currency pair may soon fall to the bottom of the triangle at 0.6840.