Australian Dollar Outlook: AUD/USD May Break Support On Jobs Report

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Australian Dollar, AUD/USD, Jobs Report – Talking Points

  • Risk aversion rises as Covid-19 forces NYC schools to close down
  • Australian Dollar gives weak reaction to positive jobs report
  • AUD/USD remains under 0.73 handle as Covid drags on sentiment

On Wall Street, Covid-related economic fears pushed stocks lower into the closing bell. The S&P 500 index fell 1.16% while the tech-heavy Nasdaq 100 index dropped 0.69%. U.S. equities accelerated to the downside after New York City announced that it will close down in-person schooling beginning tomorrow. In the Treasury market, yields across the curve pushed higher, with the 10-year yield rising from a multi-week low.

AUD/USD, E-Mini S&P 500 Futures, 10-Year Treasury CBOE Note Yield

TNX vs AUDUSD vs SPX

Chart created with TradingView

The situation across the United States continues to deteriorate with daily cases, deaths, and hospitalizations seeing a rapid rise. As of November 17, hospitals in the U.S. have 76,830 Covid patients according to the Covid Tracking Project. The figures are alarming and experts are stressing that many regions’ hospitals are at or near capacity.

U.S. Currently Hospitalized Covid Patients

US Hospital COVID

Source: The Covid Tracking Project

The announcement out of NYC reversed earlier optimism after Pfizer announced that they are ready to submit their Covid vaccine under the FDA’s emergency use authorization. The news-driven sentiment echoed across the broader market, hitting the sentiment-linked Australian Dollar.

Thursday’s Asia-Pacific Outlook:

The Australian Dollar is in focus following October’s better than expected jobs data. According to the DailyFX Economic Calendar, Australia gained 178.8k jobs versus expectations for -30k. AUD/USD has climbed nearly 4% higher since October’s close, as vaccine headlines helped bolster the Aussie-Dollar. However, momentum has flatlined in recent days as Covid dragged on market sentiment.

AUD/USD dipped below the 0.73 handle leading into the release of the Australian jobs data and has failed to retake that level following the report crossing the wires. The lack of a bullish reaction in AUD/USD shows that the overwhelming focus for traders likely remains centered on the Covid pandemic. The RBA is also likely in a wait-and-see pattern after the strong jobs data.

AUD/USD Four-Hour Chart

AUDUSD

Chart created with TradingView

AUD/USD TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter