The Australian dollar continues to rally in the Thursday session. AUD/USD is currently trading at 0.7749, up 0.34% on the day. The pair has touched a daily high of 0.7756, its highest level since March 22nd.
Employment data beats forecast
Australia continues to post strong data this week, as March employment numbers were better than expected. The economy added 70.7 thousand jobs, easily exceeding the consensus of 35.2 thousand. As well, the unemployment rate fell to 5.6%, down from 5.8% and below the estimate of 5.7%.
The only fly in the ointment was that full-time employment actually decreased, with a loss of 20.8 thousand. This didn’t seem to bother investors, as the Australian dollar has registered gains for a third straight day. However, it will be noted by the RBA, which has been closely monitoring full-time employment.
The Australian dollar is enjoying a banner week, rising a sizzling 1.75% against the greenback. Earlier this week, business and consumer confidence indicators pointed to strong optimism about economic conditions, which has boosted Aussie.
Australia is enjoying a robust recovery from the downturn due to Covid. The RBA acknowledged this in its most recent rate statement, stating that the recovery is “well underway, stronger than had been expected”. Nevertheless, the statement also noted that the economy has considerable spare capacity and unemployment remains too high.
The RBA’s message to the market is that although the economy is headed in the right direction, it’s too early to discuss tapering QE or raising interest rates. However, if the pace of economic growth accelerates, RBA policymakers may need to adjust its ultra-accomodative policy, perhaps before the year is over.
AUD/USD Technical
- AUD continues to break through resistance lines. The pair is currently testing resistance at 0.7757. If AUD continues to move higher and breaks above major resistance at 0.7800, it could target the symbolic 0.8000 level.
- On the downside, there is support at 0.7676, which is the 50-day EMA. Below, we find support at 0.7579
