Nov 04, 2022
VOT Research Desk
Following the release of US employment statistics, the AUDUSD is soaring toward 0.6420s, underscoring Fed concerns over the tight labor market.
The US economy added more jobs than anticipated, while average hourly earnings stayed stable at close to 5% YoY, increasing inflationary pressures.
In spite of the Federal Funds rate (FFR) being already at the range of 3.75-4%, the US Department of Labor reported on Friday that the US economy added 261K jobs in October, exceeding estimates of 193K.
As of this writing, the AUDUSD is trading at around 0.6440-55 after reaching a daily low of 0.6285. Despite stating the bank’s goal to decrease the rate of rate rises, Fed Chair Jerome Powell.
If we delve a bit deeper into the statistics, we find that the Average Hourly Earnings remained steady at 4.7% YoY but the Unemployment Rate shockedly increased by 3.7% due to a lower participation rate.
AUD/USD Technical Analysis
The 5-minute chart depicts how the AUDUSD plummeted after the headline news, falling as low as 0.6344.
Then, it changed course and fiercely rallied, breaking over the critical 0.6400 level and increasing its gains until it reached the daily high at about 0.6452.
Relative Strength Index (RSI) readings of 83 indicate overbought conditions, alerting traders to the possibility that the AUDUSD may come back before resuming its higher tendency.
