The Australian Dollar is trading lower shortly before the release of the March Employment Change and Unemployment Rate reports at 01:30 GMT.
The Aussie rose sharply early in the session on Wednesday on the back of the Chinese data, but prices collapsed late in the session to erase most of those earlier gains on profit-taking and position-squaring ahead of the release of today’s very important Australian jobs data.
At 01:18 GMT, the AUD/USD is trading .7170, down 0.0009 or -0.13%.
February’s employment report was mixed and in this week’s Reserve Bank of Australia minutes, the central bank didn’t sound too excited about the upcoming report. In the minutes, the RBA said that an uptrend in the unemployment rate would open the door to a rate cut.
Traders are looking for the Employment Change to show the economy added 15.2K jobs in March while the Unemployment Rate is expected to increase slightly from 4.9% to 5.0%.
The AUD/USD is likely to break sharply if the jobs report is bearish since this will increase the chances of a rate cut by the RBA. Traders are currently betting on an August rate cut by the central bank.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7206 will signal a resumption of the uptrend. This is followed by the next main top target at .7296. The main trend will change to down on a trade through .7052.
The minor trend is up. A trade through .7109 will change the minor trend to down. This will also shift momentum to the downside.
The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is controlling the longer-term direction of the AUD/USD. Currently, the Aussie is trading above this zone, giving it an upside bias.
The short-term retracement zone at .7030 to .6967 is another support zone.
Daily Technical Forecast
Based on the early trade, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the price cluster at .7154 to .7153.
A sustained move over .7154 will indicate the presence of buyers. If this move generates enough upside momentum then look for a possible retest of yesterday’s high at .7206. Taking out the previous main top at .7207 will reaffirm the uptrend. This could trigger an acceleration to the upside with the next targets a downtrending Gann angle at .7274 and another main top at .7296.
A sustained move under .7153 will signal the presence of sellers. This could lead to a quick test of an uptrending Gann angle at .7139.
The angle at .7139 is the trigger point for an acceleration to the downside. If sellers come in strong then look for a break into .7109, followed by .7079.
This article was originally posted on FX Empire
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