AUDUSD got beaten after the RBA meeting at the beginning of July. As stated in our earlier post, the 200-day moving average denied the upward momentum and AUDUSD fell below the trend channel with a bear trap. But with the combined help of Australia’s incredible jobs report, a downward wedge formation, a slight bullish RSI divergence, and the falling dollar index, AUDUSD is rising fast.
Last week’s jobs report caused a big positive surprise. The massive unemployment rate decline continues with a fall of %0.4 just in a month. Employment rose by more than 80k, close the triple the expected while the participation rate also continues to increase further. Australian jobs market becoming tighter than the US’s which is very positive for AUDUSD.
Today’s news from ECB about a 50-basis point rate hike, might weaken the dollar some more which gives AUDUSD further upside.
The main concern for AUDUSD bulls might become recession risks for developed economies. AUD is closely linked to commodity prices and major stock indexes. A major recession will be bad for the medium term.
But as long as the trend holds, a move to the 200-day moving average and after that to the upper line of the trend channel could be likely.
