- Positive Australian jobs report boosted the AUD/USD.
- The dollar is soaring after the FOMC meeting, pushing AUD/USD lower.
- Price is attempting to break above 0.70000 in the charts.
After the positive jobs report, AUD/USD price closed Wednesday on a solid bullish candle but is pushing lower on Thursday. The Australian Bureau of Statistics showed employment went up by 60,600 in May, a significant improvement from April when it went up by just 4,000.
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This surprised investors who had expected a 25,000 rise, pushing AUD/USD higher. This is an encouraging sign the economy can withstand the higher interest rates needed to control runaway inflation. The jobless rate was 3.9% in May when analysts expected a dip to 3.8%.
The labor market has recently been one of Australia’s most vital sectors. For this reason, the Reserve Bank of Australia (RBA) felt confident enough to raise interest rates this month by 50 basis points to 0.85%.
“There’s a big backlog of construction work to be undertaken, and the number of job vacancies is extraordinarily high, so people can be confident the jobs will be there, and in that environment, people will keep spending,” RBA Governor Philip Lowe said.
However, this move was capped by the rising dollar, boosted by the 75bps rate hike by the Fed on Wednesday.
AUD/USD key events today
Later in the day, investors will look out for US building permits for May, which are expected to drop from 1.823M to 1.785M. There will also be a jobless claims report, expected to drop from 229K to 215K.
From Australia, investors expect the house price index to drop to 1.4% from 4.7% for Q1.
AUD/USD price technical analysis: 30-SMA resisting gains
Looking at the 4-hour chart, we see the price has pushed up to 30-SMA and is experiencing resistance. The price is simultaneously reacting to 0.70000, a critical psychological level. If bulls can gather enough momentum to push above this resistance zone and trade above it, then we could see the return of the bullish trend in the 4-hour chart.
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However, failing to break above this level could see bears return to push the price below 0.69500. The bullish move will continue if the price can get to 0.7050.
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Saqib Iqbal
