Australia’s October employment was strong. The developments have though had little to no impact on the performance of the Australian Dollar. Economists at MUFG Bank analyze Aussie’s outlook.
AUD/USD’s next important resistance level remains the 200-DMA at 0.6596
Employment increased by 55K in October. The trend for employment growth remains strong enough (it has averaged 36.5K/month so far this year vs. an average of 43K/month in 2022) to keep the unemployment rate broadly stable. The unemployment rate increased by 0.2 points to 3.7% in October and has been fluctuating in a narrow range between 3.4% and 3.7% since the middle of last year. Overall, the report will keep alive expectations that the RBA could deliver one final hike later this year.
It appears to be more of a correction for the Aussie after strong gains in recent days. The AUD/USD rate jumped from an intra-day low of 0.6360 on Tuesday prior to the US CPI release to a high on Wednesday of 0.6542. The next important resistance level remains the 200-DMA which comes in 0.6596. The Australian Dollar has strengthened even more notably against the yen this week resulting in the AUD/JPY rate breaking above the 98.00 level for the first time since September 2022. The next important resistance levels are provided by the 100.00 level which was last broken back in late 2014 and before that in Q2 2013.
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