Today, we got employment data from Australia, which showed 15.6K jobs added in February. This was essentially in-line with forecasts which called for a reading around 15.3K. It was a rebound from January’s -14.6K print, which was a downward revision from the original -12.2K reading.
(click to enlarge; source: forexfactory.com)
The 15.6K reading shouldn’t be anything to write home about but we also saw a drop in the unemployment rate to 6.3% from 6.4%.
All-in-all, the report was slightly better than expected, but we should be cautious about depending on it too much for a bullish AUD-outlook.
The AUD/USD pulled back, but this is really a USD-paring, and not so much about AUD-strength. Now, it recently broken into new lows on the year when dropping below the 0.7643 low. It is now pulling back into the previous consolidation area, which has a central pivot around 0.7740-50, especially if the 4H RSI approaches 60 and stalls there.
Look for resistance there because the prevailing trend is still bearish, and there has not been any significant fundamental shift. Now, a break above 0.78 would break above the falling speedline and a cluster of moving averages, which would bring up another bullish correction scenario in the medium-term.
From the AUD/NZD we can see that the AUD-reaction was not bullish at all. It was actually bearish, but this was less a story of AUD-weakness, and more a story NZD-strength.
The RBNZ held its official cash rate at 3.50%, and delivered a neutral statement. Central bank watchers have started to expect more dovish tone that would lead to a rate cut, but bank governor Graeme Wheeler was very neutral in his statement.
The AUD/NZD has been bearish, and looks like it either made a clear-out correction, or is actually still trying to form a price bottom. The prevailing trend is bearish, so the bearish continuation is favored. If there is a pullback in AUD/NZD,look for sellers when it gets in to the 1.0425-1.0450 area.
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