Australian dollar rallies ahead of jobs number

The Aussie bounced from the 0.75 psychological support level to show signs of short covering on Thursday. The bounce, although somewhat small, suggests that not everybody is convinced that the jobs number will be strong, thereby mitigating some of the risk associated with being long the US dollar going into the announcement. However, the uptrend line is still well above where we are now, so the breakdown is still intact. I think that if we can make a fresh, new low, then this pair will continue to go to the 0.7350 level, followed by the 0.70 level over the longer term. I am not interested in buying this pair and less the jobs number is horrible, and we can get a sustained move above the uptrend line, and perhaps even the 0.77 handle. In fact, I would probably take the trade after a daily close above those levels, so at this point I will either be short of this pair on Friday or waiting to see how the daily chart pans out.

Pay attention to gold, the same forces that move gold will move the Aussie today as the jobs number will have such a massive influence on interest rate expectations in the United States. This of course moves the US dollar, and if the dollar rises, that not only puts wait upon the Aussie dollar itself, but also the gold market which of course is the largest member of the Aussie dollar in general.

AUD/USD Video 04.05.18