- AUD/USD declines as traders concentrate more on the unemployment rate and fulltime employment change details.
- Market sentiment ignores trade/political headlines while following general reaction to the Fed’s rate cut.
- Trade headlines, the US data will be in the stoplight for now.
With the increase in the headline unemployment rate grabbing more attention that rising employment change, AUD/USD slumps to two week low while taking rounds to 0.6790 during early Thursday.
The August month Employment Change crossed 10.0K forecast by rising to 34.7K while the Unemployment Rate matched expectations of 5.3% mark, which was up from 5.2% prior. Further, Participation Rate increased to 66.2% versus 66.1% anticipation and previous whereas Fulltime Employment dropped to -15.5K compared to 34.5K earlier.
Aussie traders emphasized more on the increase in Unemployment Rate and decline in Fulltime Employment that Employment Change and Participation Rate following signals from the Reserve Bank of Australia’s (RBA) latest media appearances that showed readiness to cut the rates further while giving importance to the unemployment rate.
Risk tone portrays the market’s upbeat sentiment after the US Federal Reserve’s hawkish rate cut while also ignoring likely challenges to the US-Japan trade talks up for late-September. The US 10-year treasury yield gains near to three basis points (bps) to 1.815% by the press time.
Given the initial reaction to the headline employment numbers, AUD/USD traders will now focus on the trade headlines as the US-China delegates will establish first trade contact after the spat starting from today. Additionally, second-tier housing and manufacturing data from the US will also be important to watch for fresh impulse.
Technical Analysis
50-day exponential moving average (EMA) level of 0.6845 and 0.6895/0.6900 area, including monthly top and 100-day EMA, seems to limit the near-term upside of the pair while downside break of 0.6820/25 region, comprising 21-day EMA and early-August high, can fetch the quote to 0.6800 and month-start high near 0.6740.
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