Big move higher in AUD/USD today, but is this the end of volatility with the latest employment data coming soon from Australia?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential setup on USD/CAD as it retests a major support area, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
| Equity Markets | Bond Yields | Commodities & Crypto |
|
DAX: 15209.15 -0.17% FTSE: 6939.58 +0.71% S&P 500: 4124.66 -0.41% NASDAQ: 13857.84 -0.99% |
US 10-YR: 1.634% -+0.011 Bund 10-YR: -0.256% +0.007 UK 10-YR: 0.819% +0.013 JPN 10-YR: 0.091% -0.015 |
Oil: 62.93 +4.57% Gold: 1,737.10 -0.60% Bitcoin: $62,196.44 -2.12% Ethereum: $2,347.05 +2.08% |
Fresh Market Headlines & Economic Data:
S&P 500 falls from record as tech weakness offsets rally in bank shares, Nasdaq closes 1% lower
Pace of U.S. economic recovery accelerates, Fed says
U.S. import prices increase solidly, seen temporarily boosting inflation
U.S. oil demand picks up steam as economic expansion quickens
German Bund yields dip as euro zone industrial output declines
In Feb. 2021, Industrial production down by 1.0% in euro area and by 0.9% in the EU
ECB’s Lagarde says euro zone economy still on crutches
Powell calls cryptocurrencies ‘vehicles for speculation’
Upcoming Potential Catalysts on the Economic Calendar
Fed Bostic speech at 8:00 pm GMT
Fed Kaplan speech at 10:05 pm GMT
New Zealand Food Prices at 10:45 pm GMT
Australia Consumer Inflation Expectations at 1:00 am GMT (Apr. 15)
Bank of Japan Kuroda speech at 1:00 am GMT (Apr. 15)
Australia Employment Change, Unemployment Rate at 1:30 am GMT (Apr. 15)
Germany Inflation Rate at 6:00 am GMT (Apr. 15)
France Inflation Rate at 6:45 am GMT (Apr. 15)
Spain Trade Balance at 8:00 am GMT (Apr. 15)
What to Watch: AUD/USD
On the one hour chart above of AUD/USD, we can see a clear upside consolidation breakout pattern in the works after the pair broke above the 0.7660 resistance area. The pair actually shot up as high as the range to break the 0.7700 handle, where the pair is currently chillin out at moment. The volatility may not stop there, though, with the latest employment situation update coming from Australia to likely keep Aussie traders moving.
Expectations are for an April net jobs gain and for the unemployment rate to tick lower to 5.7%, but April’s pace may be a bit slower than the 88K gain in March. That’s kind of a mixed picture, and if that’s the scenario that plays out (or something slightly disappointing), we could see today’s spike higher pullback quickly. Of course, if the release is notably better than expectations/the previous read, odds favor the bulls for an additional run higher.
Overall, we think long AUD/USD is the way to play it, and given expectations of a slow jobs gain, a move lower from current levels above the 0.7700 handle is the more likely scenario at the moment. If that plays out, we think buyers could be waiting to play the top of the broken range for a long play, so we’ll be looking for bullish reversal patterns there.
If the market pops higher after the event to extend the rally even further, resistance could come around the 0.7800 – 0.7850 area, which was the previous resistance area during March…and basically the top of the range the pair has been in throughout 2021. Consider a short play in this area for a longer-term swing trade if bearish reversal patterns begin to form here.
