Aussie Strengthens on Impressive Unemployment Change Data
Last week, the US Fed’s statement pointing out the possibility of three rate hikes next year strengthened the US dollar against its rivals. Even the Aussie, which is considered to be a strong commodity currency, was unable to withstand the selling pressure. It can be remembered that we had suggested traders to invest in a low or below contract on August 12th. The trade has expired in the money. Now, at the current level of 0.7220, the AUDUSD seems to be a good short-term buy due to the reasons mentioned below.
Last Thursday, the Australian Bureau of Statistics reported the unemployment change data. The economy added 39,100 jobs m-o-m in November. Analysts were expecting an addition of only 17,600 jobs in the previous month. The reported data was also higher than the upwardly revised 15,200 jobs added in October.
The price of iron ore has climbed back near to two year peak of $82.80 per ton. Iron ore is the largest export revenue earner of Australia. Thus, a rise in the price of iron ore would keep the Australian dollar stronger.
In the US, the Census Bureau reported that the new building permits declined to 1.20 million in November, against analysts’ expectation of 1.24 permits. In October, the new building permits issued hit a nine year high of 1.26 million.
As we approach the end of the year, the Greenback is expected to see profit booking. The reason is that investors will not be inclined to carry their positions into the New Year as the rally is purely based on sentiment. The investors will closely monitor the decisions taken by Trump in January and then decide their moves. This would give rise to a healthy and much needed correction in the US dollar.
Technically, the AUDUSD pair has formed a bullish shark harmonic pattern as shown in the chart below. Thus, we can anticipate the AUDUSD pair to begin its uptrend soon.
A Forex trader can capitalize on the forecast by taking a long position in the AUDUSD pair. The long position can be opened near 0.7240, with a stop loss order below 0.7140. If the currency pair starts rising as expected, then the profit can be booked near 0.7380 levels.
A binary trader can use a high or above contract to gain from the probable uptrend of the AUDUSD pair. The contract can be purchased when the pair trades near 0.7240. A binary trader can select December 28th as the expiry date for the contract.
The NFP (Non-Farm Payrolls) are behind us now. As confusing as the price action was last Friday, it did
For several months as of now, analysts’ have been concentrating on the impact of Brexit on the economy of