The Australian dollar rebounded on Thursday and recovered much of Wednesday’s 1% fall, backed by recent optimism about easing Covid restrictions in China and solid jobs in Australia.
Unemployment in Australia fell to 3.9% in April, the lowest in nearly 50 years, although the mood was exacerbated by a sharp downturn in employment growth (4000 in Apr vs 30,000 f / c).
Solid data signal further strain on the labor market, which would increase pressure on the Reserve Bank of Australia for further rates and offer further support to the currency.
A recent strength is facing headwinds at an initial 0.70 barrier, which keeps a pivotal 0.7047 barrier (falling 20DMA / 50% retracement of 0.7265 / 0.6828), with a firm break here to signal a reversal and pave the way for a stronger rebound.
Price action of equities and commodities that strongly affect the performance of the Australian dollar will be closely monitored by investors.
Res: 0.7000; 0.7023; 0.7047; 0.7098
Sup: 0.6949; 0.6931; 0.872; 0.6828