The Australian dollar continues to struggle on the global stage as markets have punished it for a weaker than expected employment report. With only 4.9k jobs created in the previous month, compared to the forecasted 20k. This is a drop when you compare it to February which saw 17.5K jobs created and the economy was looking a little stronger. To throw things further into the mix the participation rate has dropped as well to 65.5% (65.7%), meaning less people are looking for work, or have given up completely when it comes to finding a job. All in all it’s tough times for the Australian economy, and the Reserve Bank of Australia is certainly looking like it may struggle to talk up anything positive about the economy apart from the fact that commodity prices are lifting due to Russian sanctions. The biggest benefactor though of all this chaos has been the AUDUSD which continues to struggle to find any bullish momentum at present.
Looking at the chart it’s clear that a bearish wedge was in action, but the market didn’t break out as expected. Instead we’ve seen sideways movement and now a strong bearish movement, which may indicate a return to the bearish trend. The 100 day moving average continues to be a clear level of resistance which no candles were able to close past. Now with the bears in control and support at 0.7760 cracked it looks likely that it may extend all the way down to the 0.7680 area which is likely to be a strong band of support. Beyond this we could see a further push to 0.7546, but that’s likely to take some time or worse economic data coming out of Australia.
Recent reports today triggered some interesting moves for Oil markets, as it was report that there was no overhang in oil inventories anymore. In short this means that there is no longer a case of oversupply, and many OPEC nations will be breathing a sigh of relief – even though shale producers are working harder than ever to pump more oil out the ground. What was interesting was that the push today failed just short of the 70 dollar mark, which lends credit to recent thinking that oil markets are likely to range between the 60 and 70 dollar mark. If that is the case then technical levels are likely to come back into play heavily. More than anything though the fall today could most likely be attributed to the strengthening in the USD and traders should be aware of that.
On the charts the oil pull back will get the bears excited and 69.49 is looking like it may be a strong resistance level yet. Bears will be targeting the next two key levels at 67.21 and 66.05 as they push down the charts. In the event that the bulls look to take charge on a Friday then, 69.49 is the likely level to beat, but it would take a large effort to bust through.