The Australian dollar soared to a two-week high but the move was quickly faded away despite strong employment report. Initially the AUD/USD exchange rate gained as the Australian economy added 39.1k jobs in January versus 15k expected forecast. The strongest number inside the labor-market report was the full-time employment, which increased by a remarkable 65,400.
The Australian Unemployment rate came in flat at 5%, but the participation rate ticked higher to 65.7% versus 65.6% previous reading. Job creation has picked up since the beginning of the year and the bullish momentum preceding the news was understandable.
However, the bullish momentum didn’t have traction and soon after the move was quickly faded away which was also understandable. The main catalyst behind this selling pressure was a report from Westpac, Australia’s oldest bank, which suggested that the RBA will cut rates this year by 25 bps in both August and November meetings.
This is a big development from Westpac as this is their first change in their interest rate forecasts in a couple of years. WPAC also revised downward the growth forecast to 2.2% versus 2.6% which makes a strong case for a rate cut.
The labor-market statistics have always been a catalyst for higher volatility for the AUD/USD exchange rate. On its big picture the Australian dollar remains in a persistent downtrend which has been motivated by the RBA dovish stance that recognized that the record-low interest rate policy has room for another cut.
The AUD/USD technical pattern has an intraday support level at 0.7141 followed by the key pivot point 0.7100. On the upside, the first level of interest comes at the resistance level 0.7226.
Elsewhere on major currency pairs the EUR/USD exchange rate is continuing to generate consistent volatility. We’re still struggling to find a clear direction inside the current trading range which found a strong support at the 2018 low 1.1215.
The GBP/USD exchange rate is also holding above the key psychological figure 1.3000 and the bullish momentum should prevail as long as we trade above this figure on a daily closing basis. A daily break and close below the 1.3000 will again reinforce the big picture bearish trend.
In the cryptocurrency space, the top performer of the past five days is Bitcoin Gold with a gain of 6.00%. Behind it, in the second place is Ripple with a modest gain of 1.39%. The current bullish Bitcoin Gold run can extend if we can post a daily break and close above the swing high 47.00. Among the top cryptocurrencies the worst performer of the past five days is NEO coin being down -0.52%.
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