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.

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