EURAUD has been surging ahead for the last month or so, with its upward trend becoming steeper and steeper. Yet, the pair is now looking somewhat weak from a technical perspective. There is a bearish divergence between price and RSI on a 4hr chart which may highlight some underlying technical weakness.
Australia’s mildly encouraging employment report
From a fundamental perspective, the pair was suffering earlier today due to some AUD strength on the back of solid Australian employment numbers. Australia’s unemployment rate jumped to 6.3% in November as expected, but there was a surprisingly strong jump in part-time employment. Total employment rose 42.7K, underpinned by a 40.8K increase in part-term employment and a 1.8K increase in full-time employment. Also, the participation rate rose to 64.7% last month, beating expectations for it to remain at 64.6%.
It will be interesting to see if momentum starts to slow in EURAUD, which would support our short-term bearish technical bias. The 100hr SMA has proven to be a solid support line month; beyond here we’re watching 1.4830. It’s worth keeping an eye the ECB’s LTRO figures tonight and key economic data out of China tomorrow during the Asia session.