The Australian dollar pulled up 40 pips after the June labor force data was released. June unemployment rate remained stable whereas the economy creased well above expectations. We continue to expect the economy has a long way to go to join the rate hike club.

Key points:
• The unemployment rate remained steady at 5.4% in June 2018
• Labour participation rate increased by 0.2% point to 65.5%
• Full-time employment grew by 41,200
• Part-time employment increased by 9,700

The unemployment rate was steadily remained unchanged at 5.4% in June, according to the Australian Bureau of Statistics.

The economy created 50,900 in June on a seasonally adjusted basis beats the expectation of 16,500. Since June 2017, full-time employment increased by 158,200 persons, while part-time employment increased by 180,800 persons.

FX reaction: 

The cross AUDUSD rose as much as 0.50% following the June employment data. Post-the data released the cross made a high at 0.7444 and retraced back to 0.7418.

TECHNICAL OVERVIEW

AUDUSD has declined some 2% since May Labor force data

Selling pressure remains strong at 50MA, last the cross rallied and failed. We stiff believe volatility in the Yuan (KTM: USDCNH), and the selling pressure on commodity prices continue to drive the AUD in the near and medium term respectively.
Supports are at 0.7400, 0.7340 and 0.7300 with resistance seems to be at 0.7440 and 0.7500. The only local data risk event is next week’s Q2 CPI. Ahead of that, we forecast the trading range remains between 0.7530-0.7300. The bulls must settle above 0.7530 to escape further correction.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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