Australia’s unemployment rate just hit a 50-year low!
So why is AUD falling against CHF?
Before moving on, ICYMI, yesterday’s watchlist checked out a classic trend pullback play on AUD/USD ahead of Australia’s labor market data release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canada’s inflation rate inches up again, to a new 31-year high of 6.8% in April
Permits for future U.S. homebuilding tumbled by 3.2% to a five-month low in April
API reports inventory draws in crude, gasoline despite SPR release
NZ producer price index rises, with input prices up by 3.6% and output prices rising by 2.6% in Q1 2022
Japan’s core machinery orders rise 7.1% vs. 3.9% expected in March
Japan’s trade gap widens in April as imports (28%) outpace exports (12.5%)
New Zealand plans to spend NZ$1 billion to ease inflation pain
Australia’s jobless rate at a 50-year low of 3.9% but fewer positions were added in April than predicted
Shanghai authorities gradually lift COVID-19 restrictions
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.K.’s CBI industrial order expectations at 10:00 am GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. existing home sales at 12:30 pm GMT
NZ trade balance at 10:45 pm GMT
U.K. GfK consumer confidence at 11:01 pm GMT
U.K. retail sales at 6:00 am GMT (May 20)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CHF
In case you missed the headlines, Australia’s unemployment rate just dropped to a record low of 3.9% in April! Wowza!
A closer look dims some of the report’s brightness, however.
There were only 4,000 net job additions for the month against expectations of a 30,000 increase. The participation rate also edged lower to 66.3% which likely helped drag the unemployment rate lower.
The mixed numbers, combined with risk aversion in the Asian and European markets are probably why AUD/CHF has gone back to its range support on the 4-hour time frame.
The pair hit a high near .6920 but is now back to the .6850 previous support levels.
Will AUD/CHF’s range hold for another day? Or will the bearish markets finally drag AUD/CHF lower?
Technicals favor a bounce from the level with Stochastic showing an oversold signal and the candlesticks still not consistently closing below .6850.
Keep your eyes glued to the tube in case we see a downside breakout today.
The .6750 area of interest would make for a good initial target if AUD/CHF ends up breaking below the consolidation.
