- The unemployment rate in the U.S. remains steady at 3.7%.
- Nonfarm payrolls rises more than expected in October.
- Greenback recovers daily losses on the back of the data.
After touching its highest level in six weeks at 0.7260 earlier in the day, the AUD/USD pair reversed its course and gave back the majority of its daily gains. As of writing, the pair was trading at 0.7215, adding 0.12% on the day.
Today’s data from the U.S. showed that the total nonfarm payroll employment rose by 250,000 in October to beat the market expectation of 190,000. Additionally, average hourly earnings rose 3.1% on a yearly basis in October to hint at higher wage inflation. Although the September data got revised down to 118,000 from 134,000, the market reaction helped the greenback gather strength against its rivals. At the moment, the US Dollar Index is virtually unchanged on a daily basis at 96.30.
Nevertheless, TD Securities analysts note that investors are likely to stay on the sidelines ahead of the critical mid-term elections in the U.S. “The data offers a boost to the USD, though we think markets will be cautious to push this narrative with positioning stretched and event risk related to the US mid-terms next week.”
There won’t be any other macroeconomic data releases in the remainder of the day and the pair could extend its sideways move above the 0.72 mark.
Technical levels to consider
The initial resistance for the pair aligns at 0.7245 (100-DMA) ahead of 0.7315 (Sep. 26 high) and 0.7360 (Aug. 28 high). On the downside, supports could be seen at 0.7200 (psychological level/daily low), 0.7145 (50-DMA) and 0.7110 (20-DMA).
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