As expected, the 0.60 level provided some much needed support allowing the AUDUSD to consolidate ad then return to higher prices. The 0.55 level may also step in if needed having supported it well after the dramatic drop. It had only recently been applying pressure on the key 0.6750 level before the drop.
The AUDUSD has now spent almost the last three months below the key 0.6750 level and is likely to meet resistance at this level if it is able to continue to edge higher. In the last three months the AUDUSD has generally fallen sharply from a six month high above 0.70 down to the recent lows although it did enjoy some solid support from another key level of 0.6850 before dropping down to 0.6750. Likewise the 0.6850 also looms likely to offer resistance should the AUDUSD be able to get back above the 0.6750 level any time soon.
In the last two weeks of last year, it surged higher off support at 0.6850 to the six month high after having moved through previous resistance at 0.6850, which had put selling pressure on prices. The trading range between 0.6750 and 0.6850 has been quite popular in the last six months, so it wouldn’t surprise many if it was to return there again, but it needs to be able to push through the 0.6750 level first. In the last three months of 2019, the AUDUSD steadily and slowly moved higher achieving higher peaks and troughs to rally off its ten year low around 0.6670 reached in early October.
The Australian job numbers were released recently and didn’t surprise anyone as the coronavirus pandemic continues to devastate economies around the world. The devastation resulted in almost 600000 people losing their jobs in April. According to the Australian Bureau of Statistics (ABS), the unemployment rate increased from 5.2% to 6.2% and total hours worked fell by about 9.2%. “The large drop in employment did not translate into a similar-sized rise in the number of unemployed people because around 489,800 people left the labour force,” the head of labour statistics at the ABS, Bjorn Jarvis said. The ABS explained that the relatively small increase in unemployment, was the result of a decrease in people actively looking for employment, even though around 600000 jobs were lost. Despite the easing of restrictions around Australia, EY Chief Economist Jo Masters said the situation was likely to “get worse before it gets better”. “While the lower participation rate cushioned the rise in the unemployment rate, which jumped to 6.2 per cent, well below expectations of 8.3 per cent, this figure is not good news given it is driven by people leaving the workforce” she said.
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