Market turmoil continued in the Asian session this morning after questions about the Federal Reserve’s (Fed) decision to tighten its policy were answered at a policy meeting earlier this morning.
The US dollar showed only temporary strengthening at the beginning of the market reaction after the FOMC meeting, but depreciated again until the end of the New York session.
The Australian dollar was the focus of the Asian session with economic data being the focus of investor assessment.
After Australian manufacturing and services PMI data was published at the start of the session, more major focus was on the Australian employment data report for November.
The increase in jobs rose to 366,100 higher than expected 203,000 after a previous month’s record saw the Australian economy lose 56,000 jobs on an updated report.
More positively, the unemployment rate fell lower to 4.6% compared to expectations of a decline of 5.0%, from 5.2% in the previous month.
On the price chart of the AUD/USD pair, the price has surged from the support zone of 0.71100-0.71000 after testing it during the FOMC meeting before rebounding around 80 pips.
Continuing into the Asian session this morning, the rally was seen testing the 0.71800 resistance zone but failed to break it after the gloomy reaction of the Australian dollar after the jobs report was published.
But trading that resumed at the opening of the European session again showed a resurgence of prices to test the resistance zone once again.
If the resistance is still invulnerable, it is likely that investors will see the price make a decline again with the expectation that the US dollar will again show a strengthening.
The decline will re -test the 0.71000 support zone before signaling a clearer bearish trend to target the decline heading up to the 0.70000 zone.
On the other hand if the bulls manage to break the resistance zone of 0.71800, a higher rise is seen to be to the high of 0.72300 to record the latest 3 -week high.
