The Australian dollar ended Friday’s session at a five-month high against its U.S. counterpart, as traders reassessed their expectations for how quickly the Federal Reserve will roll back its stimulus program following the release of disappointing U.S. employment data.
The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000. The U.S. unemployment rate also remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%. This reports currently weakened the greenback against the commodity currencies at the end of Friday’s trading session.
The Reserve Bank of Australia held its benchmark interest rate unchanged at a record low of 2.50% at the conclusion of its policy meeting last week Tuesday. The Aussie drew additional support from hopes that China will implement economic stimulus measures in the near-term to shore up slowing growth. The Australian dollar is currently showing remarkable strength against most of its counterparts which includes the Euro, Swiss Franc and Great Britain Pound.
Weekly bias in the AUD/USD remains strongly on the upside and a break of 0.93050 resistance would bring further rise to 0.9400 and 0.9500 psychological zones. I suggest looking for only buy opportunities with MACD showing a fresh buy run is about to emerge on the 1hour and 4hours charts. As long as 0.92048 supports hold, the bulls should be in control.
In the week ahead, market players will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting for further clues on the future course of monetary policy.
Australian employment data scheduled for Thursday will also be closely-watched.