The AUD/USD pair fluctuates in the 100-point price range of 0.7580-0.7680 since the end of March, more precisely from the 24th. Basically, the Australian dollar follows its American counterpart, reacting to its ups and downs. The AUD has no arguments of its own, due to the contradictory fundamental picture.
Meanwhile, the growth of key macroeconomic indicators is combined with the RBA members rather "dovish" position. And although the April meeting was clearly can be ignored, the rhetoric of the accompanying statement was cautious and very pessimistic. In particular, the members of the regulator expressed concern about the prospects for further recovery in the labor market, in light of the end of the government's JobKeeper subsidy program. At the same time, they acknowledged that the country's economy is recovering more actively than previously expected, while noting a decrease in unemployment.
Such contradictory signals did not allow the Australian dollar to show character – at the end of the April meeting, the AUD/USD pair actually remained at the same positions. But on the wave of the voiced rhetoric, tomorrow's release may serve as a driver for the growth or decline of the Australian dollar. The fact is that the March data on the growth of the Australian labor market will be known on Thursday.
In general, preliminary forecasts are optimistic. In particular, the unemployment rate should decline to 5.7%. The indicator only came below this value in March last year, that is, before the start of the coronavirus crisis. If real numbers are in line with forecasts, unemployment will show a 5-month consecutive decline. In fact, this indicator fluctuated in the range of 5.0% -5.3% for many months during the pre-crisis. Therefore, it will be possible to say that the labor market has actually returned to the area of pre-crisis values. Moreover, a decent increase in the number of employed is also expected in March. This indicator should grow by 35 thousand, which is due to the full employment component just like in previous months. The part-time indicator, in turn, has been in the negative zone since January. Full-time positions tend to offer a higher level of pay and a higher level of social security, so an increase in the number of employees due to the full-time component will support the Australian dollar.
It can also be recalled that there was still a state subsidy program JobKeeper in March. And although benefits from this program have been paid at a reduced rate and under stricter criteria since fall 2020, almost a million Australians have benefited from the wage subsidy scheme. Experts believe that the completion of the program will hit not only the labor market, but also the country's economy as a whole. According to some estimates, about 100 thousand people in Australia will lose their jobs in the next two to three months – mainly in the tourism industry and in the restaurant sector. This can lead to a decrease in the incomes of many Australian families and, accordingly, a slowdown in the growth of consumer spending, which is the catalyst of the national economic recovery.
Such a disposition suggests that the reaction to tomorrow's release can be either none or short-term (if the forecast values are exceeded). It is clear that the RBA will draw any conclusions only after a few months, assessing the behavior of the labor market in the absence of the JobKeeper program.
Currently, the AUD/USD pair is approaching the upper limit of the price range 0.7580-0.7680, within which the Australian dollar has been trading for three weeks. The current dynamics is due to the general weakening of the US currency. Strong data on the growth of American inflation did not help dollar bulls – the information background was overshadowed by the news that the States suspended vaccination with Johnson & Johnson.
Yesterday, one person died in the United States after being vaccinated with this drug, and another patient is in critical condition. The vaccinated person died of thrombotic complications. A similar situation was with the AstraZeneca vaccine, when Europe actually suspended the campaign to vaccinate the population. According to experts, Johnson & Johnson and AstraZeneca vaccines are vector preparations. They use adenovirus as a "transport" to deliver part of the coronavirus to the human body. The main difference is that the Johnson & Johnson vaccine is based on human adenovirus, while AstraZeneca is based on chimpanzee adenovirus. Given the similarity of side effects (cases of thrombosis), market participants assumed that the United States would repeat the path of Europe. Reacting to the headlines, the US dollar index declined to 91.7, reflecting investors' concerns. However, the impact of this fundamental factor is only expected to be short-term, since the share of vaccinated with Johnson & Johnson is currently less than 5% in the US.
Technically, the current growth of the AUD/USD pair, as well as its possible upward momentum following the results of tomorrow's release, can be used as a reason to open short positions with targets in the area of 0.7580-0.7600. In order to confirm the strength of the upward movement, buyers of the pair need to break through the upper line of the Bollinger Bands indicator on the daily chart (0.7740). As long as the AUD/USD bulls are not settled above this target, there is a high risk of stalling to the base of the 0.76 mark.
