AUD/CAD : Possible increase following the recent turnaround ?
The pair in Daily started to show signs of bullish reversal with a break of the 0.88600 level and a small break at the 0.89600 level, in H4 we can see at the moving average levels that we clearly had a bullish reversal, the pair having had a strong bullish impulse after this reversal we expect a possible correction as currently around 0. 89100, moreover 93% of the retails are currently Short on this pair, which reinforces my bullish feeling, in H1 to find a correction and therefore an entry we have the recent High in Monthly which is now acting as support and a correction of the Fibo at 0.5, for a correction the level 0.89 is therefore to watch
AUD: Labor Market Data Keeps Pressure on the RBA
The second part of the Australian labor market data surprised to the upside. Employment growth in October reached 32.2 thousand jobs. Strong job growth and falling labor force participation helped the unemployment rate fall to 3.4 percent and a nearly 50-year low.
Hours worked and the underemployment rate also suggest that the Australian labor market remains very tight. Wage cost data for the third quarter released yesterday showed that this tightness is having an impact on wage growth, which reached its highest level in a decade.
Labor market data suggests that the RBA will continue to raise rates in December, and the market is expecting about 70% of a 25 basis point increase. The data is not strong enough in our view to encourage the RBA to resume 50bp rate hikes, as wage growth is in line with the RBA's forecast in its recent SoMP. The Aussie dollar has received modest support, particularly against other commodity-linked currencies such as the New Zealand dollar. UST and the 2s10s spread reaching its lowest level since 2000 are weighing on investor sentiment and the AUD.
Note: Fundamentals are showing some positive signs, but remain very tight so we could expect a bull market in the short term but see how the AUD evolves over the next few weeks, as the market is tight the currency could remain bearish longer than expected.
AUD: Labor Market Data Keeps Pressure on the RBA
The second part of the Australian labor market data surprised to the upside. Employment growth in October reached 32.2 thousand jobs. Strong job growth and falling labor force participation helped the unemployment rate fall to 3.4 percent and a nearly 50-year low.
Hours worked and the underemployment rate also suggest that the Australian labor market remains very tight. Wage cost data for the third quarter released yesterday showed that this tightness is having an impact on wage growth, which reached its highest level in a decade.
Labor market data suggests that the RBA will continue to raise rates in December, and the market is expecting about 70% of a 25 basis point increase. The data is not strong enough in our view to encourage the RBA to resume 50bp rate hikes, as wage growth is in line with the RBA's forecast in its recent SoMP. The Aussie dollar has received modest support, particularly against other commodity-linked currencies such as the New Zealand dollar. UST and the 2s10s spread reaching its lowest level since 2000 are weighing on investor sentiment and the AUD.
Note: Fundamentals are showing some positive signs, but remain very tight so we could expect a bull market in the short term but see how the AUD evolves over the next few weeks, as the market is tight the currency could remain bearish longer than expected.