Although Australia’s unemployment rate unexpectedly dropped in July to a 12-year low, the drop was largely due to people falling out of the labor force as coronavirus lockdowns limited their ability to look for work.The Australian Bureau of Statistics (ABS) emphasized the data should not be viewed as a sign of strength in the labor market noting the number of unemployed fell sharply mainly due to the restrictions of lockdowns.
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier last week when sellers took out the November 13, 2020 main bottom at .7222. A trade through the intraday low at .7212 will signal a resumption of the selling pressure. A trade through .7427 will change the main trend to up. This is highly unlikely, however, the AUD/USD is down 11 sessions from its last main top, which puts it inside the window of time for a closing price reversal bottom.
A closing price reversal bottom won’t change the main trend to down, but if confirmed, it could trigger the start of a minimum 2 to 3 day counter-trend rally. On the upside, the nearest resistance is the long-term Fibonacci level at .7379.
Bullish Scenario
A sustained move over .7236 will signal the presence of counter-trend buyers. The first upside target will be a minor pivot at .7319. Since the main trend is down, look for sellers on the first test of this level. Overtaking .7319 will indicate the buying is getting stronger. If this can create enough upside momentum then look for the rally to possibly extend into the Fibonacci level at .7379.
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier last week when sellers took out the November 13, 2020 main bottom at .7222. A trade through the intraday low at .7212 will signal a resumption of the selling pressure. A trade through .7427 will change the main trend to up. This is highly unlikely, however, the AUD/USD is down 11 sessions from its last main top, which puts it inside the window of time for a closing price reversal bottom.
A closing price reversal bottom won’t change the main trend to down, but if confirmed, it could trigger the start of a minimum 2 to 3 day counter-trend rally. On the upside, the nearest resistance is the long-term Fibonacci level at .7379.
Bullish Scenario
A sustained move over .7236 will signal the presence of counter-trend buyers. The first upside target will be a minor pivot at .7319. Since the main trend is down, look for sellers on the first test of this level. Overtaking .7319 will indicate the buying is getting stronger. If this can create enough upside momentum then look for the rally to possibly extend into the Fibonacci level at .7379.
