AUD/USD Forex Technical Analysis – Downside Momentum Likely to Increase with No Visible Support Until .6285The AUD/USD is likely to remain under pressure on Thursday as traders continue to price in a future RBA rate cut.
The Australian Dollar is trading sharply lower on Thursday after an unexpected rise in Australia’s jobless rate in January increased the chances of a near-term rate cut by the Reserve Bank of Australia (RBA). The jump in the jobless rate occurred despite a surge in full-time employment as more people hunted for work.
At 10:16 GM%, the AUD/USD is trading .6630, down 0.0048 or -0.73%.
Unemployment rose to 5.3% last month, compared with economists’ estimate of 5.2%, data from the Australian Bureau of Statistics showed Thursday. The participation rate increased to 66.1% and 13,500 jobs were added last month, slightly exceeding forecasts.
“The labor market started 2020 on a weak note,” said Callam Pickering, an economist at global jobs website Indeed Inc. who previously worked at the central bank. He said the data do not reflect the impact of the coronavirus shutdown on export and import industries and warned, “There is a real risk that the unemployment rate spikes in the coming months.”
Today’s price action indicates that traders are reading the data the same way and expecting the RBA to cut rates again in the near future.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the February 7 main bottom at .6662. The main trend will change to up when buyers take out the previous main top at .6750.
Daily Technical Forecast
The AUD/USD is likely to remain under pressure on Thursday as traders continue to price in a future RBA rate cut.
The nearest resistance is a pair of downtrending Gann angles at .6664 and .6672. Sellers are likely to return if these angles are tested.
Overtaking .6672 will indicate the selling is getting weaker or the buying stronger, but I wouldn’t worry about a short-covering rally taking place unless the AUD/USD turns higher for the session by overtaking yesterday’s close at .6678.
Closing over .6678 will form a closing price reversal top. This will indicate the buying is greater than the selling at current price levels.
The daily chart also indicates there is plenty of room to the downside with no visible support until the March 3, 2009 main bottom at .6285.