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AUD/USD Reverses Initial Reaction from Poor Jobs Data

According to the Australian Bureau of Statistics, the economy lost 4,800 jobs in May. The median forecast from economists was about 10,000. The previous month's reading was also revised much lower from 14,200 to 10,300. From the chart of employment change below, we can see that jobs data has regressed since some positive readings in the beginning of the year. 


(source: tradingeconomics.com)


The AUD/USD initial fell, respecting the 0.94 handle, even though it cracked it first. However, after falling to 0.9348, the pair got bids in the early European session. By the US session, traders bought the AUD/USD back above the week's high, above 0.94, and is threatening to challenge the 2014-high at 0.9460.


The daily chart below shows that the market has turned bullish in 2014. After consolidating since April between 0.9460 and 0.92, the market looks ready for a bullish continuation. The daily RSI stayed above 40 after it tagged 70, and is now pushing above 60. This reflects bullish continuation momentum. The 4H RSI also shows the bullish momentum is developing. The consolidation range was 260 pips, so a break above 0.9460 opens up a range projection toward 0.9720. The 0.9756, Oct. 2013 high is the next key resistance pivot.

At this point, a break below 0.9445 will be needed to take the pressure away from the 2014-highs, and maintain a consolidation mode.