Australian employment figures slightly exceeded expectations for the month of July: Australia gained 14K jobs, better than +10K that was expected. In addition, the unemployment rate is 5.2%, better than 5.3% that was predicted.
AUD/USD managed to break above 1.06 and reach a peak of 1.0613 before retreating just under this important technical line.
Last month’s figures were slightly revised to the downside: the drop in employment change was revised to -28.3K from -27K. The unemployment rate fell was revised from 5.2% to 5.3% in June, making July’s rate an actual drop.
The participation rate is at 65.2%, a bit lower than expected. Contrary to the previous month, where gains in part time jobs (+6.6K) partially covered for a loss of full time jobs (-33.5K), this month’s growth in jobs was more healthy: +9.2K in full time jobs, and +4.8K in part time jobs.
AUD/USD Struggles on High Ground
AUD/USD Struggling with 1.06 after employment data – click image to enlarge
As you can see in the chart, this is not the first encounter of the 1.06 line. While the pair did reach higher ground, there is a clear lack of momentum. This is a mix of figures that weren’t convincing enough with a lack of momentum after the huge gains already seen in this pair.
It’s important to remember that the Aussie detached itself from the euro during July (with 23 year lows in EUR/AUD), but we may now see this cross climbing up again, or at least see some loss of momentum.
New Zealand published weak employment data for Q2, but the drop wasn’t huge.
AUD/USD still keeps a safe distance from uptrend support, but if 1.06 will not be conquered in the near future, the pair could drop. More about this uptrend support line in the August monthly outlook available for download below.
