The Australian dollar ended the year on a ten-week losing streak so it wouldn’t have taken much to spark a bounce in early 2014. Yet the bounce has hardly come. AUD/USD made small gains to start the year and seemed to be on the upswing earlier this week when it hit a one-month high of 0.9086. That changed in a hurry on steep losses yesterday and today down to 0.8915 — virtually equal with the December 31 close.
The good news for the Australian dollar in 2014 is that it hasn’t fallen farther. The late-December low of 0.8821 hasn’t been seriously challenged and there are a small series of higher lows on the chart.
AUDUSD hourly chart
I wouldn’t wait until the Dec low breaks to sell the Australian dollar. As soon as those higher lows give out (on a break of 0.8867) it’s likely the start of another decline in AUD/USD. We won’t have to wait long with the Australian employment report due at 0030 GMT.
Economists are looking for 10K job gains in December and no change in the unemployment rate at 5.8%. That might be too-high of a hurdle to climb. Last month’s 21K job gain was the only jobs report above 8K since April. The four-month average is just 3.7K.
Australian jobs added or lost, monthly
Since the end of 2011, the unemployment rate has risen to 5.8% from 5.2%. Unemployment has only held steady over the past 5 months only due to a 0.4 percentage point decline in the participation rate.
