AUD/USD Forex Technical Analysis – Needs to Close Over .7578 to Sustain Upside Momentum

The Australian Dollar is edging higher, while testing a multi-year high early Thursday after a report showed Australian jobs surpassed expectations again in November, pushing the unemployment rate lower in a sign massive monetary and fiscal stimulus was bearing fruit after the country brought the coronavirus pandemic under control.

At 03:56 GMT, the AUD/USD is trading .7591, up 0.0013 or +0.17%.

Figures from the Australian Bureau of Statistics (ABS) on Thursday showed employment jumped by a stellar 90,000 in November, following an equally impressive rise in October, and the jobless rate eased to 6.8%.

Economists polled by Reuters were predicting an addition of 50,000 jobs with the unemployment rate staying at 7%.

The employment data adds to evidence that Australia’s A$2 trillion ($1.52 trillion) economy is well on its way to recovery after slipping to its first recession in three decades earlier this year.

The Aussie is also being underpinned by dovish news from the U.S. Federal Reserve and expectations of additional fiscal stimulus from the U.S. government, which could weaken the U.S. Dollar.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers edged through yesterday’s high. A trade through .7339 will change the main trend to down.

The minor trend is also up. A trade through .7507 will change the minor trend to down. This will also shift momentum to the downside.

Daily Swing Chart Technical Forecast

Although the AUD/USD inched closer to the next objective at .7677 on Thursday, the price action suggests tentative buying. This comes as a surprise given the robust employment data and the bearish outlook for the U.S. Dollar due to the extension of monetary stimulus from the Fed and expectations of fiscal stimulus from the U.S. government. This increases the probability of a closing price reversal top.

That being said, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to .7578.

Bullish Scenario

A sustained move over .7578 will indicate the presence of buyers. If this generates enough upside momentum then look for the AUD/USD to continue to move toward the June 6, 2018 main top at .7677.

Bearish Scenario

A sustained move under .7578 will signal the presence of sellers. The first downside target is the minor bottom at .7507. A trade through this level shifts momentum to the downside.

A close under .7578 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction of a minimum 50% correction of the main range.