Jump to content

Possibility of further reprieve for AUD/USD ahead of AU jobs data?

Recommended Posts

Improved sentiment overnight towards US banks and financial stability led to a rally in risk assets overnight for markets and the AUD/USD.


BG_chart_data_graph_trader_204938098.pngSource: Bloomberg

 Tony Sycamore | Market Analyst, Australia | Publication date: Wednesday 15 March 2023 

Improved sentiment overnight towards US banks and, more broadly, towards financial stability led to a rally in risk assets overnight, including the AUD/USD.

The rally in the AUD/USD overnight came despite a warmer-than-expected US inflation print, which showed the deceleration in core inflation (core inflation in February rose 0.5% vs 0.4% exp) has stalled. As well as weaker-than-expected Australian Consumer and Business confidence data released yesterday.

Specifically, the Westpac consumer confidence index remained unchanged at 78.5 (recessionary levels) and contained a rise in unemployment expectations and a fall in spending intentions. Australian Business Confidence fell 10 points to -4 in February, the lowest since last November. Both indicate a slowdown is underway as the full impact of the RBA's rate hiking cycle takes effect.

Attention now turns to the Australian Labour Force report which will be released on Wednesday, 11.30am AEDT.

What is "expected?"

Several factors suggest a rebound in employment is likely after two consecutive monthly declines. The most recent forecast has the market looking for a gain in employment of 45k and for the unemployment rate to fall to 3.6%.


AUUnemploymentRate.pngSource: Trading Economics

What would constitute a surprise?

Should the unemployment rate disappoint and print at 3.7% or higher, it may well see the RBA move to the sidelines in April and spark further conversation around RBA rate cuts into the second half of this year. This would be a positive for the ASX 200 and a negative for the AUD/USD.

Conversely, should the unemployment rate print at 3.5% or lower, it would push back talk of an RBA pause until May, pending the release of Q1 2023 CPI data on April 26. This would be a negative for the ASX 200 and a small net positive for the AUD/USD.

AUD/USD technical analysis

Last week the AUD/USD closed 2.57% lower at .6583, battered by the heavyweights of a dovish RBA, a hawkish Fed and risk aversion selling. The clean break of support at .6700/80 negated our positive bias and resulted in a negative bias looking for .6500c, leaning again the band of resistance at .6700c/.6800c, which includes the 200-day MA.

The downside follow-through we were expecting has not eventuated and has weakened our bearish conviction.

This is partially due to the dramatic repricing in the rates market following the regional banking failures over the weekend that now sees interest rate cuts priced into the curve for the US. and Australia in the second half of this year.

Nonetheless, we will remain with the negative bias unless the AUD/USD were to see a break above the downtrend resistance at .6710 and, more importantly, a sustained break back above .6800c.

AUD/USD daily chart



AUDUSD_2023-03-15_15-58-09.pngSource: TradingView

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • KO Elliott Wave Analysis Trading Lounge Daily Chart, The Coca-Cola Company, (KO) Daily Chart KO Elliott Wave Technical Analysis   FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Flat POSITION: Minute wave {c} of 2.   DIRECTION: Bottom in wave {c}. DETAILS: With yesterday’s session we’ve had a spike in volume on the bull side, which could make us start thinking the correction is either completed, or soon to be. We have almost reached 1.618 {c} vs. {a}., but more importantly we have reached the base of the leading diagonal in wave 1, where many times support is found.         KO Elliott Wave Analysis Trading Lounge 4Hr Chart, The Coca-Cola Company, (KO) 4Hr Chart KO Elliott Wave Technical Analysis   FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Flat POSITION: Wave (v) of {c}. DIRECTION: Bottom in wave (v). DETAILS: Here on the intraday chart it’s easier to see the five wave move in wave {c} which seems to have unfolded nicely. Looking for a clear sign of a bottom in place.        As of April 18, 2024, Elliott Wave analysts closely monitor the daily and 4-hour charts of The Coca-Cola Company (Ticker: KO) to provide insightful technical forecasts. These Elliott Wave predictions play a crucial role in identifying potential trends and reversal points in the stock's price movement.     * KO Elliott Wave Technical Analysis – Daily Chart* The Elliott Wave analysis on the daily chart of Coca-Cola shows a corrective phase within a flat structure, identified as minute wave {c} of 2. This phase is categorized under a counter trend function, suggesting that the ongoing correction is approaching completion. The recent trading session marked a significant increase in volume on the bullish side, hinting at a nearing end to the correction. Technically, the price has approached the critical 1.618 Fibonacci extension of wave {c} relative to {a}, reaching a key support level at the base of the leading diagonal from wave 1—a typical zone for finding support.   * KO Elliott Wave Technical Analysis – 4hr Chart* On the 4-hour chart, Coca-Cola’s stock exhibits a detailed structure of the corrective phase, clearly depicting wave (v) of {c}. This finer resolution allows for a clearer visualization of the complete five-wave move within wave {c}, indicating the likelihood of a bottom formation. Analysts are keenly observing for definitive signs that confirm the bottom is firmly in place, signaling potential bullish reversals.   Technical Analyst : Alessio Barretta   Source : Tradinglounge.com get trial here!    
    • I came across an interesting new meme token called EPIK that launched on the Solana blockchain earlier this month. It features a playful little duck character and has been gaining traction since its debut. In my opinion, several factors contribute to EPIK's potential. Meme coins naturally attract attention, and EPIK's unique duck character design helps it stand out. Additionally, backing from crypto influencers has fueled market interest. It seems on-chain activity is also picking up steam, with daily TV reaching millions of dollars and the number of holders approaching 10,000. With a strong community presence in both English-speaking and Chinese-speaking communities, a recent listing on Bitget potentially exposing it to a much wider audience, coupled with the potential for further price increases, I believe EPIK is a project to keep an eye on.
  • Create New...