News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Heads Up:🇯🇵 Industrial Production YoY Prel (SEP) due at 23:50 GMT (15min) Previous: -13.8% https://www.dailyfx.com/economic-calendar#2020-10-29
  • 🇯🇵 Unemployment Rate (SEP) Actual: 3.0% Expected: 3.1% Previous: 3.0% https://www.dailyfx.com/economic-calendar#2020-10-29
  • What is the US Dollar outlook based on retail positioning ahead of the November 3rd presidential election? EUR/USD may fall as AUD/USD rises. Which way could USD/CAD capitulate? Find out from @ddubrovskyFX here:https://t.co/BVoIcR9anM https://t.co/QW3h3nIYXX
  • Heads Up:🇯🇵 Unemployment Rate (SEP) due at 23:30 GMT (15min) Expected: 3.1% Previous: 3.0% https://www.dailyfx.com/economic-calendar#2020-10-29
  • - #Biden is leading in the polls but a last-minute surprise could be in the cards - #Covid-19 case spike, fiscal stalemate souring sentiment and derailing outlook - #AUDUSD puncturing support at 0.7018 may open the door to further declines https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/10/29/AUDUSD-Selloff-May-Deepen-With-Stalemate-on-Fiscal-Talks-Biden-Leads.html
  • The Dow Jones will look to earnings from Apple, which was once the largest component of the index. Get your #Dowjones market update from @PeterHanksFX here: https://t.co/X9sHddneM4 https://t.co/yhKKhjd7Kr
  • The Indian Rupee may weaken following a breakout higher in USD/INR. Despite rising global stock market volatility, the Nifty 50 has been holding its ground. Could it capitulate lower? Find out from @ddubrovskyFX here:https://t.co/BNJ5uTKz1A https://t.co/x0YxwlKWaR
  • Relief rally ahead for $AUDNZD? Bullish RSI divergence at key psychological support (1.0600) suggests a rebound back towards the 21-MA (1.0626) and 50-MA (1.0659) could be on the cards Conversely, a break below 1.0590 probably opens the door for further losses. $AUD $NZD https://t.co/1zUvYXyLBh
  • WTI Crude Oil fell to a fresh four-month-low this morning. This fresh low broke through range support that’s held for the better part of two months. Get your #crudeoil technical analysis from @JStanleyFX here: https://t.co/UMeWEIrTSh https://t.co/a3Ujc3Rf2z
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.02% 🇳🇿NZD: -0.16% 🇦🇺AUD: -0.25% 🇬🇧GBP: -0.42% 🇨🇭CHF: -0.59% 🇪🇺EUR: -0.62% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/vspt9gv2qH
Australian Dollar, AUD/USD May Fall as Jobs Data Underscores Dovish RBA

Australian Dollar, AUD/USD May Fall as Jobs Data Underscores Dovish RBA

2020-10-15 01:00:00
Daniel Dubrovsky, Analyst
Share:

Australian Dollar, AUD/USD, Australian Jobs Report, RBA, US Fiscal Stimulus - Talking Points

  • Australian Dollar was already under pressure before jobs data
  • Dovish RBA, rising unemployment may keep AUD/USD falling
  • Symmetrical Triangle, Death Cross point to bearish technicals
Advertisement

The AUD/USD struggled to find much support on a less-dismal Australian jobs report and may weaken ahead. In September, the country lost 29.5k jobs versus -40.0k expected. The unemployment rate also ticked higher to 6.9% from 6.8%, but didn’t match the 7.0% consensus. The bulk of job losses were seen from the full-time sector, shrinking 20.1k as part-time positions fell by just 9.4k. The participation rate held steady at 64.8%.

AUD Forecast
AUD Forecast
Recommended by Daniel Dubrovsky
What is the road ahead for the Australian Dollar in Q4?
Get My Guide

Heading into the data, the Australian Dollar was already under selling pressure. That is because Philip Lowe, Governor of the Reserve Bank of Australia, boosted dovish monetary policy expectations. For one thing, Mr Lowe noted how local 10-year government bond yields are among the highest in the developed world. That is in fact true, check out my chart below comparing AU to US, NZ, CA (Canada) and UK bonds.

Philip Lowe noted that they are grappling with whether it could be beneficial to bring down the 10-year yield. The central bank is currently implementing yield curve control on the 3-year bond. In addition, Mr Lowe reiterated that it is possible they could cut the cash rate further down to 0.10% from 0.25%. Cash rate futures are pricing in about a 75% chance of this outcome come November.

The jobs report could underscore this argument given its general weakness. Outside of local monetary policy expectations, the growth-linked Australian Dollar will likely be keeping a close eye on ongoing US fiscal stimulus talks. If policymakers struggle to break the deadlock, this could inspire risk aversion and send the S&P 500 lower. That could subsequently pressure the Aussie lower.

Are Australian 10-Year Government Bond Yields Highest Amongst Developed Nations?

Australian Dollar, AUD/USD May Fall as Jobs Data Underscores Dovish RBA

Chart Created in TradingView

Australian Dollar Technical Analysis

The Australian Dollar is trying to break under a Symmetrical Triangle chart pattern. Confirming the breakout could open the door to extending AUD/USD’s top since late August. That would entail clearing the 0.7015 – 0.7064 inflection zone, exposing June lows. Further supporting the bearish technical argument is a ‘Death Cross’ that formed in late September after the 20-day Simple Moving Averaged fell under the 50-day one.

AUD/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 10% -5% 3%
Weekly -6% -16% -10%
What does this mean for the AUD/USD outlook?
Get My Guide

AUD/USD Daily Chart

Australian Dollar, AUD/USD May Fall as Jobs Data Underscores Dovish RBA

Chart Created in TradingView

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES