Australian Dollar: USD/AUD (AUD=X) Dip in Unemployment Rate Lowers Chances of Aussie Rate Cut
The Australian and New Zealand Dollars are trading mixed on Thursday in reaction to several key economic reports. The Aussie is being supported by a jobs report that indicated the employment situation was starting to stabilize. The news also trimmed the chances of a Reserve Bank rate cut in February that rose earlier in the week. In New Zealand, GDP rose more than expected, but traders weren’t moved by the news.
Australian Unemployment Falls Unexpectedly
Australian unemployment fell unexpectedly, helped by booming growth in part-time employment.
According to the ABS, hiring increased by 39,000 during the month after seasonal adjustments, nearly triple the 15,000 increased expected by economists. Furthermore, with the participation rate holding steady at 66.0 percent, the boost in hiring was enough to see the national unemployment rate dip 0.1 percentage points to 5.2 percent. Economists were looking for unemployment to remain unchanged at 5.3 percent.
The prospects of another rate cut from the RBA in February dimmed following employment news with the odds of a rate cut at the RBA’s first meeting of 2020 falling to 44 percent from an earlier reported 63 percent.
Stronger-than-expected U.S. economic data earlier this week has investors thinking the Fed is unlikely to raise rates over the near-term. This helped drive U.S. Treasury yields higher on Wednesday, pressuring the Aussie and Kiwi.
On Thursday, investors will get the opportunity to react to U.S. economic data that includes the Philly Fed Manufacturing Index, Weekly Unemployment Claims, the Conference Board’s Leading Index and Existing Home Sales.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.68.
The projected upper bound is: 0.70.
The projected lower bound is: 0.68.
The projected closing price is: 0.69.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 33.6258. This is not an overbought or oversold reading. The last signal was a sell 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.00. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 95 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 70. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 12 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.003 at 0.688. Volume was 30% below average (neutral) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume___
0.685 0.689 0.685 0.688 39,463
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.69 0.68 0.69
Volatility: 8 7 7
Volume: 45,524 48,397 71,341
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX AUD= is currently 0.3% below its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of AUD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AUD= and have had this outlook for the last 4 periods.