The Australian dollar is struggling to continue its recent multi-month price advance against the US dollar after the April jobs report from the Australian economy provided a mixed picture of the current employment situation.
Bulls and bears have been battling around the 0.7700 to 0.7900 levels for much of the last four weeks. Worryingly for bulls the AUDUSD pair has not been rallying despite the price of iron ore picking up over recent days. Typically, the Australian dollar performs well when the iron ore prices post strong gains.
Digging into the Australian jobs report, the headline number came in much weaker than expected, with the Australian employment change moving to -30,600. This was a big miss on many fronts, and down heavily from the previous months number of +70,700.
On the positive front, the unemployment rate came in at its lowest since April 2020. Officially, the Australian unemployment rate fell to 5.5 percent, which was weaker than the 5.6 percent expected, and the 5.7 number seen last month.
A steep drop in the participation rate was seen as the reason why the unemployment rate dropped. This puts the Reserve Bank of Australia in a tough spot next month, meaning that they are more likely to keep low interest rate and their bond buying scheme in place, which could weigh on the AUDUSD pair.
On the technical front a number of bearish head and shoulders patterns continue to loom over the AUDUSD pair. These patterns are littered across various time frames and provide some evidence that the Australian dollar could be about to decline.
According to the ActivTrader market sentiment tool some 68 percent of traders are bearish towards the AUDUSD pair. Considering that the AUDUSD pair is in a bull market and we typically look to fade retail sentiment, it is probably a good time for the Aussie to rally right now.
AUDUSD Short-Term Technical Analysis
The four-hour time frame continues to show that a head and shoulders pattern is looming over the pair, with bulls and bears battling around the 0.7700 to 0.7900 level..
According to the overall size of the head and shoulders pattern, a 200 point directional move will take place once a break from the 0.7700 to 0.7900 price range takes place.
Given the bull trend and negative sentiment, it is more likely than not that the AUDUSD will invalidate this small bearish pattern.
See real-time quotes provided by our partner.
AUDUSD Medium-Term Technical Analysis
Looking at the daily time chart, a large head and shoulders pattern has formed, following the recent bearish move towards the 0.7600 support level.
According to the overall size of the bearish price pattern, the AUDUSD pair could be about to drop towards the 0.7050 level.
AUDUSD traders should be aware that sellers have been struggling to ignite the pattern, and we are now seeing an attempt potentially invalidate this pattern. A move above the 0.8000 level could cause the AUDUSD pair to surge towards the 0.8500 level.
See real-time quotes provided by our partner.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |