AUD Weekly Outlook: Can Session Low Support Aussie Dollar
By: Eddy Peng Apr 23, 2018
The Australian dollar had a second day of decline against the greenback on Friday, down 0.76 percent to close at US$0.76684, a session low over the past three weeks. Aussie dollar proceeded to drop after the Australian Bureau of Statistics said on Thursday that the national employment rose less than forecast, which may suggest interest rates will stay on hold.
Australian economy added 4,900 jobs in March, only around a quarter of economists’ estimates, while February’s gain was revised to a 6,300 loss after a seasonal reassessment. The unemployment rate, the key metric for the central bank, held at 5.5 percent as fewer people sought work last month.
The job gains decline should further damp any expectations of the Reserve Bank of Australia lifting interest rates this year, because RBA’s Governor Philip Lowe says he wants the labor market close to full employment, at about 5 percent jobless rate, before he considers the first hike since 2010.
The AUD/USD seems to be struggling between the upper line of mid-term descending channel and horizontal support level near 0.7649. The intraday price as of 12:20 p.m. in Sydney likely gets bolster by this support line. If it’s not going to edge lower to break out, a rebound to test a resistance of 61.8% Fibonacci retracement could be seen. A push above that exposes the upper line of that descending channel. Conversely, a breakout lower will expose a long-term support of the rising trend line from January 2016.
Chart 1: AUDUSD Daily
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