Jobs Miss the Mark and Weigh on the AUD/USD
Rowan Crosby • 2 min read
The AUD/USD was already a little on the soft side and today’s jobs data won’t help.
While the numbers weren’t a disaster, they are still weaker than the experts predicted. We saw the jobless rate creep up to 7.1% from 7.0%, while the jobs lost came in at -227.7K (vs. expected -78.8K).
At the same time, the biggest falls happened in the prior month, but we have seen some good results in other countries – namely the US.
We must also remember, that the numbers are masking a hidden truth. When the COVID crisis hit and people started losing their jobs, the Government introduced a number of programs that effectively kept workers on the payroll – known as JobKeeper. These people, who are technically not working, are considered employed, which is why the jobless rate is not as bad as it could have been.
AUD/USD is Soft
Despite the data, we have seen the AUD/USD making a series of lower highs and to me price is ripe to test the big support level at 0.6800.
Shuold that level break, as I have been saying all week long, then price will be in for a tumble. Today’s data is the type of catalyst that could weigh heavily.
We have already seen a fall of -0.5% so far on the back of the release.
The other big one to watch is retail sales which are due out tomorrow and for the most part, the expectation is that sales are recovering.
But clearly there are still concerns. With immigration in Australia at 0 for the foreseeable future, there are likely going to be concerns in a number of areas and when all these Government programs end, there could be another sharp jump in the jobless rate around Septemeber. The border closures are also costing around 5000 jobs which is significant.
That’s going to be a big one to watch.