The AUD/USD currency exchange rate performed relatively sideways for the better part of Tuesday’s trading session with both bullish and bearish attempts met by retracements.
The AUD/CAD traded just above the 0.6369 level with strong support at the 0.6389 price level. It then turned bullish, managing to break through the 0.6439 resistance level but it was remained confined below the 0.6449 resistance level as the bulls lacked enough strength to push through. This was followed by a retracement that ensured that the price remained relatively sideways for the better part of the day.
The sideways performance in the AUD/USD currency pair suggests the cautious approach on Tuesday ahead of Australia’s upcoming employment report. However, Wednesday morning demonstrated a difference in sentiments compared to Tuesday’s performance. The currency pair’s performance for the better part of Wednesday’s trading session was strongly bearish following a statement by Australia’s Treasurer, Josh Frydenberg, and the expectations of a negative employment report.
Frydenberg believes that Australia’s unemployment rate will surge to 10 percent within Q2 2017 from the previously reported 5.1 percent. That is a likely number considering that roughly 1.4 million Australians had lost their jobs due to the coronavirus outbreak in March. About 3.92 million Australians were jobless by the end of March, a record high for the Aussie economy.
The past few months have been quite rough on Australians. The coronavirus pandemic came in quick succession after the devastating wildfires that rampaged through vast areas of the country. So far the coronavirus impact is the worst that Australia’s economy has experienced since the 1940s. Some analysts expect the situation to get worse especially considering that the coronavirus is still spreading and the situation is far from being in control.
There is also concern over the recession that will occur from the situation and how long it might take for the economy to recover. The AUD/USD’s bearish performance on Tuesday morning indicates the Aussie dollar’s weaker performance due to unfavorable investor sentiments ahead of the employment data which is already expected to be dull.