Thursday 23 March 2017

AUD/USD Poised for Breakout Ahead of US Jobless Claims

The Australian Dollar (AUD) inched lower against the US Dollar (USD) on Thursday, decreasing the price of AUDUSD to less than 0.7650 ahead of the US Initial Jobless Claims data. The technical bias shall remain bullish because of a higher high in the ongoing upside rally.

US Initial Jobless Claims

The US labor department is scheduled to release the Initial Jobless Claims data today during the US trading session. According to the average forecast of different economists, the jobless claims registered 240k reading this week as compared to 241k in the week before.
Initial Jobless claimes
The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market.
A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.

How to Trade Today’s Jobless Claims Report

  • Buying the AUDUSD put options can be a good strategy if the US initial jobless claims data exceeds the average projections of economists.
Put Option
  • Alternatively, buying the AUDUSD call options may be a good move if the jobless claims figure misses the forecast.
Call options
Technical Analysis
As of this writing, the pair is being traded around 0.7637. A support can be noted around 0.7625, a short term horizontal support ahead of 0.7450-0.7475, the confluence of 50% fib level as well as another trendline support area and then 0.7159, the swing low of the last major downside move.
AUD/USD Technical Analysis
On the upside, a hurdle can be noted near 0.7731, an immediate trendline resistance ahead of 0.7770, another trendline resistance zone as demonstrated with red color in the given above daily chart.  A break and daily closing above the 0.7770 trendline resistance shall incite renewed buying interest, validating a move towards the 0.8000 resistance zone. The technical bias shall remain bullish as long as the 0.7490 support area is intact.

How AUDUSD Reacted on Past Jobless Claims Releases?

Last time the labor department released its jobless claims data on 16th March, 2017. The AUD/USD pair fell by 10 pips after the release of last jobless claims figure as the actual reading was upbeat i.e. 241k v 240k.
The pair fell by more than 50 pips after the release of March 9, 2017 report as the actual reading came out 243k vs the 223k forecast.

9 March initial jobless claims report
Previous release

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