Unemployment may have remained stable, but it is not on track for the RBA target, which is seeing an increase in requests for RBA cuts in July.
Currently, the unemployment rate was really focused on the unemployment rate, which remained stable at 5.2%, but lost expectations of falling to 5.1%. If it were not for the fact that the RBAs have a 5% goal at the end of Q2, this could have been fine. But since the markets already had a 50% chance of a July cut yesterday, we suspect that today’s employment data could tip the balance towards a July cut at today’s close. We can see an increase in unemployment compared to the SOMP forecast of RBA and, given that it is predicted to fall to 4.8% by June 2021, the additional increases with unemployment will only hear the requests for new cuts and sooner.
AUD is currently the biggest weak point of today, with AUD / JPY being the main driver (and loser) of today. We can see on the daily chart that AUD / JPY has just reached its lowest level since the sudden collapse of January, in an attempt to break a lateral correction pattern. In addition, a prominent swing has been formed with the bearish bearish bar on Monday. The minimum of 74.55 reaches an obvious short-term target, although we expect the AUD / JPY to break below the July 2016 low after an initial rebound, given the strength of the bearish momentum leading to the correction.
As for AUD / USD, the retracement line and the pivot support level of 0.6938 were ahead of the meeting (the latter acted as today’s maximum). Currently, in a minimum of 9 days, the momentum favors the bear field, so we would prefer to sell to the intraday rallies and point to the key support levels.