Risk Off Prevails, AUD Down After AU Jobs Data

Investors’ Morale Remains Subdued

The dollar traded higher against all but one of the other G10 currencies on Wednesday and during the Asian morning Thursday. It gained the most versus SEK, AUD, GBP and EUR in that order, while it underperformed only against JPY.

DJIA — Technical Outlook

The Dow Jones Industrial Average index continues to move sideways, roughly between the 22940 and 24902 levels. However, some might say that DJIA is forming somewhat of a head-and-shoulders pattern, which may be seen as a reversal sign. That said, still, a break of the 22940 hurdle would be required, in order to aim for lower areas. Until then, we will take a neutral stance.

AU Employment Data Disappoint

Back to the currencies, the Aussie was the second loser in line, coming under decent selling pressure following Australia’s employment data. The unemployment rate rose to 6.2% from 5.2%, instead of surging to 8.3% as the forecast suggested. However, looking at the slide of the participation rate, the not-that-big increase in the unemployment rate may be due to many people losing their jobs and refraining from registering for unemployment benefits. Indeed, looking at the employment change, we see that the economy lost 594.3k jobs, which is the biggest plunge on record.

AUD/USD — Technical Outlook

From around the end of April, AUD/USD is moving sideways, roughly between the 0.6373 and 0.6570 levels. The pair is currently declining, however we will take a neutral stance, as long as the rate remains inside that range. We need to see a clear break through one of the sides of the range first, before considering the next directional move.

As for Today’s Events

From the US, we get the initial jobless claims for last week. Although expectations are for a slowdown, they are still expected to see a strong jump once again. The forecast is for 2.5mn new claims, with continuing claims set to climb to 25.1mn from 22.65mn the week before.

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