AUD/USD and AUD/JPY
This indicator has been marked by sharp fluctuations, as may be seen below. December’s data was dismal, with a decline of 22.6K. The market had expected a gain of around 10.3K. A turnaround is expected in the January release, with some estimates standing at around 15.3K. The Unemployment Rate is expected to nudge higher to 5.9%, from the present 5.8%.
The Participation Rate, above, has shown a marked decline since July 2013 and forecasts lead to the expectation that this rate will steadily fall. January is expected (by consensus) to see a 0.2% slip to 64.4%. The trend in Unemployed Persons is one of considerable momentum which is unlikely (with respect to this class of data) to be broken suddenly.
A turnaround of significant proportions is not likely, with price action more than likely to be driven by the two speeches scheduled for later in the day (Thursday), given by R.B.A. Assistant Governors Debelle and Kent.
They are unlikely to want to see a strong AUD, for reasons of export, so may very well ‘talk down’ the AUD in the hope of relieving some of the recent strength gained by their currency. This talk could be given more credence by the market if the employment data is poor, as expected. The caveat here is, of course, data dependent, however, there should be no great surprises in store.
AUD/USD Daily Chart" title="AUD/USD Daily Chart" width="474" height="242">
The AUD gained strength over the USD, in the past days, by over 200 pips; due to the relative strength in Gold. The 1300 handle in Gold is critical for the Aussie and is likely to offer a good resistance area in the interim.
The RBA recently removed comments with regards to no further action or rate cuts from their text, thus providing the initial catalyst for the moves higher in AUDUSD, however weak Employment data and the continued positioning of the RBA to prefer a weaker Aussie vs the US Dollar (remember the 0.85 comments), could provide some good downside potential in this pair.
Resistance: In the short term 0.9060
Support: 0.8681, again, data dependent.
AUD/JPY Daily Chart" title="AUD/JPY Daily Chart" width="474" height="242">
Much of the potential loss of the AUD/JPY (as in other AUD pairs) was stemmed by the R.B.A. moved away from its previous policy of lowering rates, citing higher inflation. However, the ‘safe haven’ Yen is still to be favoured over the AUD in the medium term.
Resistance: 91.42, however, should this be broken decisively on Thursday trading then look to 89.31.
Support: 90.31 area.