AUD/USD Forex Technical Analysis – Aussie Investors Hoping Employment Data Helps Fuel Recovery from Plunge

The Australian Dollar is trading flat early Thursday, shortly before the release of a key report on Employment Change and Unemployment. The reports are expected to show the unemployment rate holding steady at 3.5% and a ninth straight month of job creation. Traders estimate the economy added about 26.5K new jobs in July versus 88.4K in June.

At 00:08 GMT, the AUD/USD is trading .6936, down 0.0001 or -0.01%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $68.71, down $0.84 or -1.21%.

Aussie Employment Data on Tap

Traders are hoping the employment numbers beat the estimates following Wednesday’s steep sell-off. The Aussie is on track to post its biggest weekly decline since January, and a weaker-than-expected jobs report could easily spike it towards its worst week in year.

To recap yesterday’s events, the Reserve Bank of Australia (RBA) minutes from its August meeting signaled further interest-rate increases would come in the period ahead, while restating it will be guided by incoming economic data and the inflation outlook.

Additionally, Australia’s wages rose at their fastest rate in almost eight years but still less than half the headline inflation rate, a record gap likely to fuel calls at next month’s jobs summit for more steps to halt the decline in real household incomes. The news helped trigger a plunge in the AUD/USD.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6870 will change the main trend to down. A move through .7137 will signal a resumption of the uptrend.

The short-term range is .6682 to .7137. Its retracement zone at .6909 to .6856 is the next downside target and potential support. On Wednesday, the AUD/USD dropped as low at .6911.

On the upside, the nearest resistance is the main retracement zone at .6983 to .7053.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at .6909 is likely to determine the direction of the AUD/USD early Thursday.

Bullish Scenario

A sustained move over .6910 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the main 50% level at .6983. Overcoming this level will indicate the buying is getting stronger with the main 61.8% level at .7053 the next target.

Bearish Scenario

A sustained move under .6909 will signal the presence of sellers. This could trigger a sharp break into the main bottom at .6870, followed by the short-term Fibonacci level at .6856. A trade through this level could trigger an acceleration to the downside with the July 14 main bottom at .6682 the next major target.