The Australian Dollar held above its 0.6400 support level despite the larger-than-forecast Jobs lost in April. While the Unemployment Rate bettered forecasts at 6.2% from a median 8.2%, this was understated by the fact that most Australians left the work force. Under Australia’s “JobKeeper” program, they are classified as employed while their pay comes from the government.
The Battler has held up well against the US Dollar and crosses mainly because Australia’s central bank (RBA) is one of the least radical among its counterparts (in stark contrast to the RBNZ).
Speculative market positioning has also been short of Aussie bets for some time now, and this adds to the support for AUD/USD. One negative on the horizon is Australia’s developing trade war with China.
Today the spotlight falls on Chinese and US economic reports. The Aussie traded to an overnight low at 0.64033. Immediate support lies at 0.6400 followed by 0.6370. Immediate resistance can be found at 0.6500 and 0.6550. A break of 0.6550 will see strong resistance at 0.6600 tested. If we see an overall weaker US Dollar and a rise in risk sentiment, we will see that 0.6600 tested. Till then, look to trade a likely 0.6430-0.6560 range. Am neutral, trade the range shag.
