Australia printed weaker than expected jobs data earlier today.
Can AUD/USD break below its head and shoulders neckline when the U.S. PPI is released?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s channel support test after the U.K. printed weak CPI data. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Jan retail sales surged by 3.0% m/m vs. projected 1.9% rebound
U.S. Jan core retail sales rose 2.3% m/m vs. estimated 0.9% uptick
Empire State manufacturing index improved from -32.9 to -5.8 in Feb
U.S. industrial production fell flat in Jan vs. estimated 0.5% m/m increase
Goldman Sachs lowered recession odds from 35% to 25%
EIA crude oil inventories rose by 16.3M barrels on SPR release
Japanese Dec core machinery orders rose by 1.6% m/m vs. estimated 2.7% gain
Japan’s trade deficit balloons to record 1.82T JPY as Chinese exports slump
Calls for RBNZ rate hike pause increase on cyclone’s national emergency
Australia’s MI inflation expectations slowed from 5.6% to 5.1% in Jan
Australian economy lost 11.5K jobs in Jan vs. estimated 19.8K increase
Australia’s Dec employment change figure downgraded from -14.6K to -20K
Australian jobless rate ticked higher from 3.5% to 3.7% instead of holding steady in Jan
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core PPI at 1:30 pm GMT
Philly Fed index at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
BOE MPC member Pill’s speech at 5:00 pm GMT
FOMC member Cook’s speech at 9:00 pm GMT
RBA Governor Lowe’s speech at 10:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/USD
So much for pricing in more interest rate hikes from the RBA!
The Land Down Under printed a dismal jobs report earlier today, revealing that the economy shed 11.5K jobs in February instead of the projected 19.8K increase.
This was enough to bring the unemployment rate up by a couple of notches to 3.7%. It didn’t help that the December reading was downgraded to show an even larger drop in hiring of 20K!
With that, Aussie bulls rushed to exit their long positions, bringing AUD/USD back down to the neckline of its head and shoulders pattern.
A break below this support zone could set off a drop that’s the same height as the chart formation, which spans a little over 300 pips.
Technical indicators aren’t so convinced, though, as the 100 SMA is still above the 200 SMA while Stochastic is pulling higher from the oversold region.
Then again, the gap between the moving averages is narrowing to hint at a potential bearish crossover, so watch out for that.
Also, don’t forget to keep an eye out for the U.S. PPI figures, as these could influence Fed tightening expectations. RBA Governor Lowe has a speech coming up as well, which just makes things even more exciting for AUD/USD!
