AUDUSD is testing major technical resistance zone

6:38 PM 13 April 2023

Antipodean currencies are doing very well during Thursday's session. Both the New Zealand and Australian dollars are strengthening against the US dollar. Today's gains on the AUD are due not only to USD weakness caused by better-than-expected inflation data from the US, but also to news coming out of Australia, where a solid employment report was released today (employment change +53k vs. 20.6k forecast). The March unemployment rate remained low at 3.5% versus the expected 3.6% and the previous 3.5%.

  • Investors saw the report as an opportunity for the RBA to intervene as a strong labor market could make inflation more entrenched. The focus, however, will be on next week's CPI report, and for the moment, markets still don't see much chance of movement from the RBA;
  • In addition, Australia's trade surplus remains at record levels, with the latest data showing that it amounted to AUD 13.87 billion in February. The country is tightening its trade relations with China, and has successfully diversified its commodity export market in recent years. The market also does not expect cyclone Isla to significantly affect iron ore production in the Pilbara region.

Looking technically at the chart of the AUDUSD currency pair, the quotation broke out of the downward channel at the top some time ago, and we are currently observing a test of the key resistance in the area of 0.6785. If it is overcome, the way towards 0.6885 may be opened. Source: xStation5

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