The Australian dollar continues its path of recovery and has moved above a previous double top on the hourly chart. This happened after hitting a double bottom in the multi-year lows. The break above resistance is still not confirmed.
The Aussie ignores worrying figures from Australia and China. Is it an opportunity to short the pair? A continuation of the correction depends on jobs data.
0.9036 was the low that the Aussie met early in July (when it was hit by the RBA) and it then moved to hit 0.9180 twice. After this rise, it fell once again and reached 0.9040. This time, the recovery continued and the pair broke above 0.9180 to touch 0.92. While this break isn’t confirmed yet, the Aussie seems firmer on the charts.
But while it seems firmer on the charts, fundamentals don’t really provide support. More Chinese forecasts are downgraded, and Australian numbers disappoint:
- The ANZ job ads showed a fourth consecutive month of falls, this time of 1.8%.
- The NAB business confidence number was flat, but the business conditions deteriorated to -8 points.
- Chinese PPI remains negative: producer prices in Australia’s No. 1 trading partner are falling, and this isn’t good for Australian exports.
The big event of the week is the release of Australia’s job figures. An OK report or even a surprisingly good one could keep the Aussie bid. But a weak or awful report (something that cannot be ruled out) would put an end to the Aussie’s recovery.
For more lines and events, see the AUDUSD forecast.
