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The Australian dollar has moved sharply extremely strong labour market data for May was released. Jobs in the economy expanded at a rapid rate while the unemployment rate moved lower.
The AUDUSD pair rose after Australian Bureau of Statistics released official jobs data that shows a significant increase in employment figures in May 2023.
According to the report, nearly 76,000 jobs were added to the economy last month, sending unemployment down to 3.6 per cent. This rate is only just above the 48-year low of 3.4 per cent reached in October 2022.
The strong figures came as a shock to economists, who were typically expecting 15,000 jobs to be added last month and the unemployment rate to remain steady at 3.7 per cent.
With this in mind, the AUDUSD pair is also more bullish technically. It is both bullish on lower- and upper-time frames and currently shows strong upside reversal patterns across the four-hour and daily time frames.
According to the ActivTrader market sentiment tool some 71 percent of traders are bearish towards the AUDUSD pair. As we typically look to fade sentiment biases, this could mean the AUDUSD pair could continue to higher.
It is worth mentioning that high levels of bearish sentiment suggest a classic contrarian sentiment trade is still in the making, so do be careful selling this pair at current level, especially as we trade around current levels.
AUDUSD Short-Term Technical Analysis
The four-hour time frame shows that the pair is trading above the Ichimoku cloud and all support. We may see the AUDUSD pair advancing towards the 0.7000 area in the coming weeks.
If the thickening of the is correct then a move back to the 0.6850 region soon. In Ichimoku analysis a thick cloud suggests that the price trend is extremely strong.
Alternatively, if a strong breakout takes hold below 0.66400, then a decline towards 0.6400 support level might start to take place.
AUDUSD Medium-Term Technical Analysis
The daily time frame shows that the AUDUSD pair has posted 8-straight days of upside gains. Back-to-back gains are one of the most reliable visual evidence of strong daily trends.
According to technical analysis we could a bullish reversal pattern forming. The pattern depicts a pending 400-point rise if we start to see the price holding above the 0.6850 level.
