The Australian dollar reminded us of its strength, riding north on another round of good employment figures. It’s now approaching an important resistance line. An update on this strong currency.
The Australian unemployment rate fell to the lowest level in 11 months: only 5.3%. This exceeded expectations for a small rise from 5.5% to 5.6%.
Contrary to the US, where the unemployment rate falls and jobs are are lost, Australia sees another rise in jobs: 52.7K – almost four times the early expectations of 15.2K job gains. Note that also last month’s job gain was revised upwards to 37.2K.
All in all, we’ve seen four strong months of Australian job gains, exceeding expectations in both parameters again and again.
AUD/USDÂ Technical Analysis
The Aussie leaped after the release: AUD/USD made a instant sharp more of about 100 pips from 0.8760 to 0.8860 and then continued above 0.89. The move stopped at the time of writing.
The big technical barrier appears at 0.8950, a line that served many times as a support and resistance line. If this barrier is broken, the next hurdles appear at 0.9090 and 0.9170. These were too recent minor technical lines.
If the Aussie breaks through these lines, there’s a big resistance line at 0.9322. This was a line that was tested 3 times in the passed, and was breached only once – when the Aussie reached the 2009 high of 0.9405.
Last month’s excellent employment figures sent the Aussie towards this line but it failed to break it. This was a sign of the dollar’s strength at that time. It’s now far from 0.9322.
If the dollar sweeps the board as it did in the same time last week, the Aussie is supported at 0.88, followed by 0.8735. Even lower, strong support is found at 0.8567. Further below, the 0.477 resistance line played an important role during the summer of 2009. AUD/USD had a hard time breaking through this area.
For more technical lines, check out the AUD/USD forecast.
The Australian economy is very strong. In recent weeks, the Aussie lost a lot of ground on Chinese tightening measure, risk aversion trading and also on the weaker-than-expected Q3 GDP – only 0.2%. Australian growth currently doesn’t match the growth in jobs. A higher growth rate will probably be seen in Q4.
The employment indicator always has a strong impact. It sure pushes the Aussie higher.
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