- AUD/USD bounces off yearly low on strong jobs report for July.
- Australia Employment Change rose past -46.2K forecast, Unemployment Rate dropped to 4.6%.
- DXY jump amid sour sentiment keeps bears hopeful.
- Virus updates, central bank signals become the key, second-tier US data may offer intermediate moves.
AUD/USD picks up bids to 0.7230, off November 2020 low, after Australia jobs report for July surprised markets with positive data during early Thursday. It should be noted, however, that the challenges to the global sentiment keep the pair sellers hopeful.
Australia Employment Change jumped past 29.1K prior and -46.2K forecast to +2.2K whereas Unemployment Rate dropped below 4.9% previous readouts and 5.0% market consensus to 4.6%.
Read: Aussie Unemployment Rate drops to 4.6% vs 5.0% expected, AUD better-bid
Despite the upbeat data, the virus-led local lockdowns in Australia and the US Dollar Index (DXY) rally favors the AUD/USD pair bears.
Bloomberg aptly portrays the virus woes while saying, "Australia has suffered its worst day since the start of the Covid-19 pandemic, with total daily cases surpassing the previous record posted more than a year ago as a delta variant outbreak spreads as far as New Zealand." On the other hand, Reuters said, “The United States leads the world in reported COVID-19 cases and deaths. Daily U.S. cases soared from fewer than 10,000 in early July to more than 150,000 in August as the Delta variant took hold.”
It should be noted that the DXY’s double-top breakout also exerts additional downside pressure on the AUD/USD prices. In doing so, the US Dollar Index ignores downbeat US 10-year Treasury yields and mildly bid S&P 500 Futures.
Other than the coronavirus-led market pessimism, the July Federal Open Market Committee (FOMC) Minutes also weighed on the risk appetite and underpinned the US dollar’s safe-haven demand. The FOMC minutes shed the rate hike concerns, despite supporting the tapering, while also conveying the dissatisfaction of employment recovery among the policymakers.
Having witnessed the initial market reaction to the Aussie employment data, AUD/USD traders will jump back to the qualitative catalysts for fresh impulse. Among them, the covid headlines and central bank signals will be important. Also, the weekly prints of the US Jobless Claims and monthly Philadelphia Fed Manufacturing Survey for August may offer short-term direction
Technical analysis
Unless bouncing back beyond July lows near 0.7288, AUD/USD remains vulnerable to drop towards late October 2020 high surrounding 0.7180.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.