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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Australian dollar solid after ok jobs data, CPI ahead next week

The Australian dollar was steady after jobs data matched prior read; today’s data is against a backdrop of a strong domestic economic outlook and CPI could see RBA lift-off for rates in May.

Source: Bloomberg

The Australian dollar was little moved after the March unemployment rate came in at 4.0% against the 3.9% forecast and 4.0% previously. The overall change in employment for the month was 18k instead of 30k anticipated.

Full time employment increased 21k, while part time jobs decreased 3k. The unemployment rate remains at a 14-year low.

Today’s date is ahead of the all-important first quarter CPI number on April 27th. It could prompt the RBA into rates lift-off in the middle of a federal election campaign at their May meeting.

The RBA have form in doing so, they raised rates in the middle of an election campaign in November 2007 as inflation was ticking up.

The underlying fundamentals remain strong for the Australian economy with trade data remaining positive, although missing expectations earlier this month. The figures revealed a domestic economy in full throttle, with exports steady, but the value of imports surging on the back of local spending.

The boost in spot commodity prices, as a result of the Ukraine war, is yet to hit the national balance sheet, as shown in chart below from the RBA. The prices received by exporters is likely to increase over the coming quarters.

The immediate outlook for AUD/USD is fraught with uncertainty. A long weekend beckons, and with it, illiquid trading conditions.

This Friday will see most of Europe and North America away from their desks. Then Monday morning will see Australia on holiday for the Asian open to start the week. FX is described by some pundits as 98% boredom and 2% sheer terror. Without volume, thin markets can make for the later.

AUD/USD technical analysis

AUD/USD remains within an ascending trend channel after today’s jobs data. Yesterdays close developed a bullish Spinning Top Candlestick formation. This might signal a reversal of the current sell-off.

Before the recent spike up in AUD/USD, a Golden Cross was observed when the 21-day simple moving average (SMA) crossed above the 260-day SMA. The opposite of a Golden Cross is a Death Cross which could be a bearish signal. The 10-day SMA is close to crossing below the 21-day SMA.

Observing the different tenures of these SMAs, an interpretation of these conflicting 'crosses' might be that short term momentum may see bearishness, but that underlying medium and long-term momentum remains bullish for now.

Nearby support may lie at 0.7368 and the 260-day SMA, currently at 0.7385. On the topside, resistance could be 0.7556 and the recent peak of 0.7661.

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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