Employment surge leaves traders skeptical
It is too good to be true.
The Australian employment report came out with an oversized 58.6K gain last night. The expectation was 15K. 40K of the 58K were full time. Victoria's unemployment rate fell from 6.3% to 5.6%. This despite the fact that the automotive sector in that region is winding down. The countries unemployment rate tumbled to 5.9% from 6.2%. WOW.
It was so "WOW", the market is saying "HMMMM". That HMMMM is some skepticism. It seems too good to be true.
The AUDUSD did move sharply higher on the report. It had to. The high peaked at 0.7153 This was near the 50% midpoint of the move up from the September low (see chart above at 0.71585). A trend line was also near that area.
Since then, the price has moved lower and is now testing the midpoint of the surge higher at the 0.7104 level.
For a super duper number, the rally certainly fizzled out. When you get quick moves higher and the follow through fades, the buyers at the upper extremes get nervous, angry, frustrated. I think that is what we are seeing.
Overall, the number should keep the RBA on the sidelines. That should be somewhat supportive for the currency but it might take some proof from other data to get market traders believing - or at least heal the angry, frustrated feelings.
PS the price is falling below the 50% retracement level as I type as longs get more frustrated. The 0.7063 level is the 100 hour MA. That level should find buyers if it continues the fall.
