Aussie Remains Bullish On Strong Employment Data

The weak inflationary pressure and lower-than-anticipated JOLTS job data keeps the US dollar weak against its rivals. However, the Aussie remains bullish on unexpected strength seen in the price of iron ore. The country is also expecting a considerable increase in natural gas exports this year. Based on these facts, the AUDUSD pair had rallied about 400 pips in the past one month to currently trade at 0.7980 levels. We anticipate the uptrend to continue due to reasons given below.

The Australian Bureau of Statistics reported a 34,700 job additions in December, down from an upwardly revised 63,600 job additions in the previous month, but greater than 13,200 anticipated by analysts. The unemployment rate nudged upwards to 5.5% in December, from 5.4% in the earlier month. Economists had expected an unemployment rate of 5.4%.

In the US, the Census Bureau reported building permits of 1.30 million in December, unchanged from the earlier month, but greater than 1.29 million anticipated by analysts. However, the ground breaking on new homes eased to 1.19 million in December, from 1.30 million in the earlier month. Analysts had expected housing starts of 1.28 million. The figures reported last month reflects the fastest pace of housing starts in the past 13-months.

In the meanwhile, the Federal Reserve Bank of Philadelphia reported a decline in the manufacturing index to 22.2 in January, from 26.2 in December, and lower than analysts’ expectations of 24.9. The leading indicator of economic health is based on a survey of 250 manufacturers in Philadelphia. Thus, economic data indicate that the AUDUSD pair will remain in an uptrend in the short-term.

Technically, the AUDUSD pair is trading above its 50-day moving average. Further, the currency pair has a strong support at 0.7880 and the MACD histogram is making new highs. Thus, we can expect the bullishness to continue.

We prefer to trade the uptrend by opening a long position in the currency pair near 0.7880, with a stop loss order below 0.7770. If we establish a trade, then a take profit order will be placed near 0.8140.

In the binary market, we may purchase a call option to capitalize on the current rally in the AUDUSD pair. The option offered by the binary broker should not expire before January 27. Additionally, we may enter only if the currency pair trades at about 0.7880 in the spot Forex market.

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