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James Hyerczyk
Australia Dollar
Australia Dollar

The Australian Dollar is trading higher early Thursday, getting a boost from better-than-expected employment data. The news means nothing to the trend, but it does force investors to make position adjustments and that’s what we’re looking at today. While the report beat expectations, the major concern for the Reserve Bank of Australia is inflation. They are hoping that a strong labor market will eventually lead to higher wages.

At 0628 GMT, the AUD/USD is trading .7186, up 0.0014 or +0.22%.

Australia’s employment rose a strong 44.0K in August, more than reversing the modest 4.3K drop in July. Over the past three months, employment has risen an average of 33K per month. The strength was due to a sharp rise in full-time jobs (33.7K), while part-time jobs also rose (10.2K). The Unemployment Rate was stable at 5.3 percent, while the participation rate rose 65.7 percent.


Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on September 11. A new main bottom has formed at .7085. A trade through this level will signal a resumption of the downtrend. The main trend will eventually turn up on a trade through .7363.

The minor trend is also down. It will change to up on a move through .7235. This move will also reaffirm the shift in momentum to up.

The main range is .7363 to .7085. Its retracement zone at .7224 to .7256 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.


Daily Technical Forecast

Based on the early trade, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the steep uptrending Gann angle at .7165.

A sustained move over .7165 will signal the presence of buyers. If this can generate enough upside momentum then look for a possible extension of the rally into a 50% level at .7224, a downtrending Gann angle at .7243 and a Fibonacci level at .7256. Since the main trend is down, anyone of these levels could draw the attention of sellers.

A sustained move under .7165 will signal the presence of sellers. The first downside target is an uptrending Gann angle at .7125. This is followed by another uptrending Gann angle at .7105. This is the last potential support angle before the .7085 main bottom.

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