Market news

16 December 2021

AUD/USD keeps post-Fed gains below 0.7200 on upbeat Australia employment data

  • AUD/USD reverses pullback form weekly high after Aussie data, holds Fed-linked run-up.
  • Australia Unemployment Rate dropped, Employment Change rallied in November.
  • RBA’s Lowe showed readiness to keep rates low, cited needs for 4.0% wage growth, full employment for rate hike.
  • Second-tier US data, including Preliminary PMIs for December, can offer additional direction but ECB is the key.

AUD/USD picks up bids to 0.7172, extending the post-Fed increase as the Australia Employment report for November flashed welcome signs during early Thursday. Adding to the pair’s advances could be the market’s preparation for the European Central Bank (ECB) monetary policy meeting and mixed concerns over the US stimulus and Omicron.

Australia Unemployment Rate dropped to 4.6%, below 5.0% forecast and 5.2% prior, whereas the Employment Change rose to 366.1K from +200K expected and -46.3K previous readouts. Further, the Participation Rate also crossed 65.5% market consensus and 64.7% prior with 66.1% figures.

Read: Aussie Unemployment Rate big beat supports AUD/USD

Earlier in the day, RBA Governor Philip Lowe rejected the rate hike in 2022 while also saying, “Prepared to keep rates low if domestic economy requires it.” “Would like to see wages growing at 4% and full employment,” the RBA Boss added.

Furthermore, Australia’s Commonwealth Bank (CBA) released preliminary PMI data for December. The activity numbers showed Manufacturing gauge rose past 57.1 forecast to 57.4 but easing below 59.2 previous readouts. Further, the Services PMI also stepped back from 55.7 to 55.1, dragging the Composite PMI to 54.9 from 55.7, versus 53.7 market consensus.

Given the firmer Aussie jobs report keeping RBA rate hike expectations on the table, as Lowe said, “If other central banks tightening would increase probability of us following,” AUD/USD bulls keep controls by the press time.

It’s worth noting that the stimulus hopes from the US and mildly bid S&P 500 Futures also help the AUD/USD prices. On the same line are the likely preparations of the US dollar bulls to retake controls after the ECB meeting, with bearish expectations.

Moving on, preliminary readings of the monthly PMIs and Omicron updates will also be watched in addition to the ECB for clearer direction.

Read: European Central Bank Preview: More recalibration or actual tightening?

Technical analysis

AUD/USD portrays an inverse head-and-shoulders bullish chart pattern on the four-hour play, with 0.7170 acting as the neckline, a break of which will direct the quote towards crossing the 200-SMA level of 0.7234 to aim for mid-November swing high near 0.7370. Meanwhile, the monthly horizontal support near 0.7090 can test the bears before directing them to the yearly low near 0.6990.

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location