Australian jobs preview and where to next for the AUDUSD

Tomorrow at 11.30 am Sydney time, Australian labour force data for September is due to drop.

The forecast is for another significant fall in employment of around -120k driven by lockdowns and mobility restrictions. The participation rate is expected to drop from 65.2% to 64.8% and moderate the rise in the unemployment rate from 4.5% to 4.8%.

The risks for all measures are for weaker readings, if only as some payback for ten straight months of falls in the unemployment rate, to its lowest level since 2008.

That said, it is likely that the market looks through weak numbers tomorrow in anticipation of a rebound into yearend supported by leading labour market indicators.

An example of which is job postings on leading job sites have surged in recent weeks as businesses planned for the reopening, an indication the underlying labour market remains strong.

As noted in an interview yesterday on Money FM 89.3, here the market is repricing currency pairs based on whether they are a net energy importer or exporter.

Reflecting this, the currency pairs of energy exporters have done well, including the CAD, NOK, and AUD. In contrast, the currencies of energy importers, including the EUR, JPY, CHF, and JPY, have seen a red mark placed against their names.   

Based on the energy thematic running through the currency space, an expectation of a strong rebound in employment in coming months, and the fact that the market remains heavily short of the AUDUSD, we think the downside in the AUDUSD is limited.

Turning to the charts, the AUDUSD currently sits at .7340, just above a band of support .7320/00 area. Providing the AUDUSD continues to hold above this support and trades now lower than .7280/75, the view remains that a short-covering rally towards .7500c has commenced.

AUDUSD 13th of October



Source Tradingview. The figures stated areas of October 13th, 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation



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