Australian dollar slides as unemployment rate jumps
May 14, 2020
Posted by: Analysis Team
Category: FOREX, Technical Analysis
The Australian dollar declined slightly after the Bureau of Statistics released the April jobs numbers. The data showed that more than 594,000 Australians lost their jobs between March and April. Unemployment rose by 104,500 to 823,000 while the unemployment rate rose to 6.2%. Analysts polled by Bloomberg were expecting the rate to jump to 8.3%. Also, the total hours worked declined by about 9.2% while underemployment rose to 1.8 million. These numbers show how the Australian economy has been affected by the ongoing pandemic. Still, with the country reopening, there are chances that the situation has peaked.
The US dollar remained relatively stable after the Fed chair delivered a speech at the Peterson Institute yesterday. In the speech, he said that the US economy faced a long route to recovery and asked policymakers for more fiscal stimulus. He also ruled out negative interest rates that had been suggested by Trump. Later today, we will receive the initial jobless claims data. Analysts expect that another 2.5 million Americans filed for these claims. Also, we will get the export and import price data from the US.
Asian stocks declined today as the market continued to worry about the rising tensions between the United States and China. In China, the Shanghai index declined by 0.60% while the Hang Seng fell by more than 1.57%. In Japan, the Nikkei 225 index fell by 0.75%. These declines followed another dismal performance in the US, where the Dow Jones fell by more than 2%. Tensions between the two countries have been rising as they trade accusations on the current pandemic. Yesterday, China complained that Donald Trump had asked the biggest government pension not to invest in China equities.
The EUR/USD pair declined in overnight trading as the market waited for the US jobless claims data. The pair is trading at 1.0810, which is significantly lower than yesterday’s high of 1.0895. On the hourly chart, this price is between the 23.6% and 38.2% Fibonacci retracement level. Therefore, the pair may continue falling as bears attempt to test the 23.6% retracement level at 1.0795.
The XBR/USD pair declined to a low of 29.35 even as inventories from the United States fell. This price was the lowest it has been since Tuesday last week. On the hourly chart, the price has been on a slow decline after it peaked at 32.37 a week ago. The price is slightly below the 50-day and 25-day exponential moving average while the RSI has been falling. Therefore, the pair may continue falling and possibly test the important support at 28.
The AUD/USD declined after the Australian jobs data. The pair reached a low of 0.6420, which is the lowest it has been since Monday last week. The price is also below the 50-day and 25-day EMA while the RSI has moved to the oversold level. Therefore, the pair may move lower and retest the 50% Fibonacci retracement level at 0.6400.