AUD/USD turns positive as Australia's wage growth beats estimates


  • AUD/USD adds 10 pips on above-forecast Aussie wage price inflation data. 
  • Surprise contraction in Australia's consutruction sector keeps gains under check.
  • Other macro factors support continued gains in the Aussie dollar.

AUD/USD is now trading marginally higher on the day, with Australian currency finding some love in the wake of an upbeat December quarter wage price index – the metric used by the Reserve Bank of Australia and the Treasury to gauging wage growth.  

While economists expected 0.3% quarter-on-quarter wage growth in the final three months of 2020 following a meager 0.1% increase in the previous three months, the actual figure came in at 0.6%, beating projections. In annualized terms, wages grew 1.4% versus 1.1% expected and 1.4% previous. 

The progress in pay rise, alongside a continued drop in the unemployment rate, is good news for the Aussie dollar. 

So far, however, the Aussie bulls have been cautious in cheering the data. The AUD/USD pair has added around ten pips to trade near 0.7922, representing a 0.15% rise on the day. The slow ascent could be associated with the surprise contraction in the construction sector in the final quarter of 2020. 

Construction Work Done fell by 0.9% in Q4, missing the expected 1% rise by a big margin following the preceding quarter's 1.8% decline. 

The pair, however, could challenge and break above 0.7917 – the high of Tuesday's indecisive Doji candle – later today if the stock markets pick up a bid and treasury yields drop in response to the Federal Reserve Chairman Jerome Powell's dovish testimony. 

The message that came out from Powell's speech to Congress was that the economy remains a long way from the Fed's goals. The central bank remains committed to current accommodation and asset purchases at least at the current pace. 

Besides, expectations for large US fiscal stimulus supports the reflation theme and could keep commodities better bid, helping the AUD maintain its bullish trajectory. 

Technical levels

AUD/USD

Overview
Today last price 0.7912
Today Daily Change -0.0002
Today Daily Change % -0.03
Today daily open 0.7914
 
Trends
Daily SMA20 0.7727
Daily SMA50 0.7701
Daily SMA100 0.7481
Daily SMA200 0.7267
 
Levels
Previous Daily High 0.7936
Previous Daily Low 0.788
Previous Weekly High 0.7878
Previous Weekly Low 0.7724
Previous Monthly High 0.782
Previous Monthly Low 0.7592
Daily Fibonacci 38.2% 0.7914
Daily Fibonacci 61.8% 0.7901
Daily Pivot Point S1 0.7884
Daily Pivot Point S2 0.7853
Daily Pivot Point S3 0.7827
Daily Pivot Point R1 0.794
Daily Pivot Point R2 0.7966
Daily Pivot Point R3 0.7997

 

 

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