- Increase in unemployment opens the door for the RBA’s rate cut.
- Upbeat Aussie employment change limits the downside.
AUD/JPY presently trades near 75.55 after it dropped 40 pips to mark the fresh low since January 04 during early Thursday.
Australia’s employment data raised the hopes of a rate cut from the RBA after the headline unemployment rate rose past 5.1% expectations and 5.0% prior to 5.2%. The same dimmed better that 14.0K forecast and 25.7K previous readout of employment change that rose to 28.4K. Further, the participation rate grew 65.8% from 65.7% expected and earlier.
The Trump administration finally laid grounds to ban China’s Huawei from the US telecom sector citing national security threat. Also dimming the risk sentiment was the US-Iran tension.
Despite witnessing a pullback during late-Wednesday, market risk-tone remained heavy at the start of the day as headlines from the US haven’t been positive to trade sentiment. Barometer of global risk, 10-year treasury yield for the US government bond, slipped nearly 2 basis points to 2.36% by the press time.
While Aussie employment data have already been released, the Australian Dollar (AUD) traders may now concentrate on the speech by the Reserve Bank of Australia’s (RBA) Assistant Governor Michele Bullock that is up in next few hours.
January 04 low of 75.20 gains immediate attention of sellers as a break of which can open the doors for the pair’s slump to July 2016 lows near 74.55 and June 2016 bottom around 72.40. Though, 75.00 may become an intermediate halt to watch during the south-run.
Meanwhile, 76.30 and a month-old descending trend-line at 76.75 seem nearby resistances that question buyers targeting 77.45/50 resistance-area comprising multiple lows marked during January and March.