Established in 1974
185,800 clients worldwide
Over 15,000 markets

AUD bounces on jobs

The main theme in the FX space has been USD weakness with some mild profit taking kicking in this week after recent gains.

AUD
Source: Bloomberg

After stuttering just shy of 90, the dollar index is now just holding on to 88 with a rebound in the euro and yen being the key moves. Even some of the commodity currencies such as the AUD have managed to regain ground against the greenback.

AUD/USD slumped to a low of $0.8224 earlier in the week but has now reclaimed the $0.8300 handle. November jobs numbers released today breathed life into the AUD after finally showing some positive signs. The pair was also significantly oversold and some traders may have used this as an excuse to bid it a bit higher.

The unemployment rate ticked up to 6.3%, which was in line with expectations. Considering the participation rate was also up, this is less concerning. The economy added an impressive 42,700 jobs but the majority of them (40,800) were actually part-time.

As a result, some of the steam in the AUD evaporated once traders dug into the detail. While AUD/USD is still trading above $0.8300, I feel there could be some selling on the way here.

The key will be whether the pair can manage to close above the downtrend resistance, which comes in at 0.837. If it continues to fail there, we could be in for renewed weakness.

AUD/USD
Click to enlarge

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.

Find articles by analysts