Australian employment numbers were excellent, but weren’t enough for the Aussie – it failed to break the important resistance line for the second time this week. Double top? Or just a matter of time?
Australia’s employment change figure showed a rise of 35,200 jobs. This was better than last month’s Aussie job figures and also exceeded early expectations by a three fold. The market was expecting a 10K job gain.
The second employment figure was also superb: Australian unemployment rate fell to 5.5%, the lowest in 8 months. Also last month’s unemployment rate was positively revised to 5.6%.
This shows, again and again, the strength of the Australian economy. After the Aussie was hurt from a relatively low GDP for Q3, this figure raises the chances for a fourth consecutive rate hike in Australia, which already has an interest rate of 3.75%.
AUD/USD reacted with a leap: The Aussie jumped from 0.9240 to 0.9300 instantly and later peaked at 0.9328. This is at the all-important resistance line. This level served as a resistance line several times towards the end of 2009, and just on Monday.
Yes, AUD/USD failed to breach the line twice in the same week.
What does this mean? A double-top could mean that the Aussie doesn’t have the strength to conquer higher ground, and that the dollar is still strong.
I continue to be bullish on the Aussie, and I see these figures as another proof of the Australian economy’s strength. The chance will come to breach this line.
In the meantime, AUD/USD retreated to 0.9310. No Australian figures are published until the end of the week. The upcoming American CPI and especially the UoM Consumer Sentiment in the US might trigger the next moves.
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