Australian Employment Change

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Yesterday I wrote about the Australian GDP. It’s data was lower than expected, not huge amounts of deviation but, it appears to be enough to move it past the 1.02 level.

It’s looking like today’s daily bar will close under 1.02 and with more high impact AUD news to come for the week, we could see the AUD continue to hit new lows.

With a couple more ugly months, I’d expect to see the AUDUSD breaking below 1.00. Take a look at the weekly chart at the top to see the strong bearish momentum.

However, if they decide to lower interest rates, that could light a fire under the AUD, rocketing it back to the north. Time will tell.

This evening we have employment rates being released by the Australian Bureau of Statistics. 9:30 pm EST will be the time and employment change is known for having great deviations. With bearish news this evening, I’ll definitely keep my bearish stance on the AUD overall.

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As far as technicals, I would be surprised if we didn’t have some retracement here at the 1.02 support level. If it continues to burst through, all of you who are short on the AUD could have a great month in my opinion!

I’d love to get some interaction going! Please leave your comments and feedback concerning this fundamental analysis![/column]

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  • Martin,

    Thanks for your feedback!

    To state the obvious, if Australia decides on lowering the interest rates, that could change everything. If they break down and lower it 50 basis points, that would be huge.

  • Martin (Estonia)

    I think the effect of Chinese softening has been greater and faster than any has expected. Or Australian data can show the real magnitude of Chinese slowing which is believed to differ from the officially reported one. I Agree with your fundamental view and think that Australia has difficult months ahead, given that Chinese problems are still developing and have not formed your finally. Plus since Australian dollar is heavily correlated with Dow Jones and the news from Europe have not gone positive in the last weeks, the drag could go on for a while. Saw that UBS forecasts 1.00 in 1m and 0.97 in 3m.