The Australian dollar was knocked off its perch above 77 cents after weaker than expected jobs data yesterday.
“The past 24 hours showed how traders can do a savage reversal (on the Aussie) given how sharp the turnaround that we saw after it hit 77 cents,” said Greg McKenna, senior market strategist at CFD and FX provider AxiTrader.
“This is now the 8th time in the past few months when we saw the Aussie dollar slumped and reversed after hitting the 77 cents mark.”
He added that unless or until the Aussie can clear out the selling between 0.7700 and 0.7830 the Aussie is trapped.
What’s behind the Aussie dollar’s fall was the much weaker than anticipated September jobs data release yesterday.
“The apparent loss of 53,000 full-time jobs, was all the excuse traders needed to thump the Australian dollar back from its perch in the resistance and supply zone above 77 cents,” McKenna said.
He pointed out that “The peak to trough move of 117 points saw the Aussie as the weakest performer of the major currency pairs in the past 24 hours by a long margin.
The Aussie was trading around 0.7730 at 11.30am yesterday so as soon as the jobs data, and the big miss with a print of -9800, hit the screens it was clear the Aussie dollar was going to be knocked lower.
That was then reinforced by the big fall of 53,000 full-time jobs.
Now the monthly seasonally adjusted data is rubbery.
“It’s been widely criticised in Australia’s economics community. It doesn’t fit with private sector survey data and indications of employment, and the changed focus from the Australian Bureau of Statistics to “trend” data in the past year or so suggests even Australia’s official statistician understands this,”
“But, just as traders react to Chinese data, US data, and the data releases of any other nation they have no choice but to react to the data the ABS posts. To do otherwise would be suicide for their account balance,” McKenna said.
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