Australian Employment Preview: Solid Jobs Report To Revive AUD/USD’s Bullish Momentum

With the country’s job keeper programme ending in March, easing of the lockdown restrictions and the rollout of the covid vaccine, the RBA reiterated that it would be too early to consider the stimulus withdrawal.

AUD/USD probable scenarios

Ahead of Thursday’s employment report, AUD/USD has eased off the five-week highs, reached at 0.7806 on Tuesday. The surge in the US Treasury yields, amid the US stimulus and covid vaccine optimism-led reflation trade, dulls the attractiveness of the aussie as an alternative higher-yielding asset.

However, a bigger-than-expected drop in the Australian jobless rate could revive the bullish momentum in the aussie dollar, which could bring the 2021 tops at 0.7820 back in play. At the moment, AUD/USD holds above the bullish 50-Simple Moving Average (SMA) on the four-hour chart, placed at 0.7737. A downside surprise in the jobs data could trigger a sustained break below the latter, exposing the horizontal 200-SMA at 0.7712.

The aussie’s reaction to the data could also depend on the risk tone prevalent during the time of the release, as China returns from a week-long Lunar New Year holiday.

Four-hour chart

(Click on image to enlarge)

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