Forex Crunch Aussie Leaving Dust Behind it on Jobs Data

Aussie Leaving Dust Behind it on Jobs Data

Posted: 08 Jul 2010 12:37 AM PDT

Important job figures showed another improvement in Australian employment. This pushed the recovering AUD/USD above technical barriers on its way up. Update on this strong currency.

Australian employment change showed a gain of 45,900 jobs in June. This was triple the early expectations that stood on a modest gain of 15,000. It’s important to note that last month’s figure was revised to the downside – from 26,900 to 22,800, but this doesn’t undermine the great gain in jobs. Also the complementary figure was excellent:

The Australian unemployment rate fell once again – to 5.1%. This is the lowest level since January 2009 and shows that the economy is very strong, despite the rate hikes.

This continues a trend of positive surprises and especially drops in the unemployment rate seen in previous months. Last month’s job data followed the exact same path.

AUD/USD reacted with a big rise. It leaped from 0.8660 to 0.8740 and peaked at 0.8760 later on – a safe distance from the resistance line of 0.88.

The pair already had a good week with a gradual rise from 0.8430. The first point of struggle was the strong pivotal line of 0.8567 which served as a strong support and resistance line in the past. After it crossed this important line, it continued upwards and managed to pass the 0.8735 line (December’s low) just before the job figures were released.

Above 0.88, the next line of resistance is the round number of 0.90, followed by 0.9135, but 0.88 is a strong barrier for now.

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Forex Daily Outlook – July 8 2010

Posted: 07 Jul 2010 02:00 PM PDT

US Unemployment Claims decrease, Britain, Manufacturing Production expecting a rise and the Australian Employment Change and Unemployment Rate are changing. Here is an outlook on today’s events.

In the US, Unemployment Claims, weekly report that measure the number of individuals who filed for unemployment insurance for the first time during the past week; droops down to 461K from 472K and affects the labor-market conditions;

Later in the US, Crude Oil Inventories a weekly US indicator that affects the loonie due to Canada’s sizable energy sector; and measures the change in the number of oil barrels held in inventory. It influences the price of petroleum products which affects inflation but also impacts growth due to produce goods;

In Canada, New Housing Price Index (NHPI); monthly report that measures the change in the selling price of new homes; is about to rise by 0.5% and attract investors and spur industry activity;

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, European Central Bank (ECB); Press Conference with 2 parts – first a prepared statement is read, then the conference is open to press questions that create heavy market volatility. It covers in detail the factors that affected the most recent interest rate and other policy decisions,

Later in Europe, European Central Bank (ECB); Minimum Bid Rate that measures the Interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system is on 1% and short term interest rates are the paramount factor in currency valuation – traders look at most other indicators.

Finally in Europe, A decrease of 1% is anticipated now in the German Industrial Production monthly report, that measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities; and affects the is correlated with consumer conditions such as employment levels and earnings;

For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis.

Moving on to Great Britain, House Price Index (HPI), Halifax Bank of Scotland (HBOS); an influential rise is anticipated from -0.4% to 0.6%. It’s a leading indicator because rising house prices attract investors and spur industry activity;

More in Great Britain, Manufacturing Production monthly report that measures the total inflation-adjusted value of output produced by manufacturers; shows a rise from -0.4% to 0.6%. It’s correlated with consumer conditions such as employment levels and earnings;

Finally in Great Britain, Official Bank Rate at the Bank of England (BOE), Monetary Policy Committee (MPC); stays on 5%. When there is a change in rates the MPC will also issue a statement and be overshadowed by the MPC Rate Statement which is focused on the future. The short term interest rates are the paramount factor in currency valuation.

Read more about the Pound in the GBP/USD forecast.

In Australia, Employment Change a monthly report that measures the number of employed people during the previous month; is about to droop down from 26.9K to 15.3K and as job creation is an important indicator its accounts for a majority economic activity;

Later in Australia, Unemployment Rate shows stability by 5.2%, monthly report that measures the percentage of unemployed that actively seeking employment during the previous month. It’s an important signal of overall economic health.

For more on the Aussie, read the AUD/USD forecast.

That’s it for today. Happy forex trading!

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