November 10, 2021 16:06:05

Australian unemployment is released overnight and is forecast to rise to 4.8% from 4.7% in September. The labour force is expected to gain 50k jobs. Strong lead indicators remain firm even during the most recent lockdowns. This suggests there is potential upside to the data. Further out, much will depend on how participation bounces back in the recovery phase.

Of course, the report will have implications for the RBA and monetary policy. At present, their most recent statement (SOMP) maintains the start of rate hikes in 2024, with a chance of late 2023. But risks are increasing for earlier rate moves with rising inflation expectations and a solid recovery in the economy.

AUD/CAD nearing long-term resistance

After topping out in late February near 1.00, this pair has fallen steadily until August. Lows were made at 0.9110 and rising prices have been capped by trendline resistance around 0.9375.

Bears again tested the 0.91 zone in October before rebounding. But the double bottom trigger looks to have failed with prices falling late last month from 0.9337. The pair recently consolidated below 0.9250 around the 50-day and 100-day SMAs.

Trend momentum has now turned bearish in line with the dominant trend. Initial support comes in around 0.9144/50. The low 0.91s are key support. The October 2018 low also sits at 0.9104.

GBP/AUD downtrend still intact

This pair has been in a bearish descending channel since September. A series of lower highs and lower lows saw prices make a cycle bottom at 1.8126 at the start of this month.

Sellers pushed the RSI into oversold territory below 30. Prices also fell out of the bear channel. The rebound took the pair up to the top of the range and above the 200-day SMA.

Prices fell back more recently before trying to break decisively out of the long held channel. Buyers today made an intraday high at previous resistance at 1.8425. Again, we have failed here and pushed back into the price range. Initial support is 1.8189.