Originally published by AxiTrader
The Australian dollar is sitting at 0.7845 this morning roughly mid-range of some key levels that will indicate where the next 100 to 150 point move will come from as traders await both the Australian employment data and a big day of Chinese economic releases.
Looking first at the local data we get the September employment report at 11.30 AEDT this morning with the market looking for a 15,000 increase in jobs in September to follow August's stellar 54,200 increase. The unemployment rate is expected to remain unchanged at 5.6%.
After such a solid run of strong jobs data I'd normally be a bit cautious about today's data. But with the NAB business survey's employment sub-index still very strong and other leading indicators of employment pointing higher a weak number would be a surprise.
That of course is a huge risk for the AUD/USD because we'd likely see the reemergence of the narrative that followed the much weaker than expected retail sales earlier this month. That is, Australian households are stretched with debt, assailed by low wages growth, have a low savings rate, and as a result have run out of fiscal space to continue consuming at recent levels.
So in many ways, the risks to the Aussie are a little asymmetric today because the fears that retail sales ignited have been doused by the subsequent data - including the NAB business survey and Westpac consumer sentiment.
That means if support at 0.7815/20 gives way we could see a move back to the recent low around 0.7737. That level would need to hold to avoid a run toward 0.7650/60.
On the topside it's 0.7900/30. But this level looks to continue to constrain the Aussie dollar and would need to break to change what's an overall negative technical outlook right now.
That's particularly the case given overnight weakness in iron ore and base metals more broadly. But again those moves, and by extension the Aussie dollar, are going to be influenced by the big data dump out of China today.
In a bigger than Ben Hur day of release, China will print its Q3 GDP growth, along with retail sales, industrial production, and urban investment just 90 minutes after the release of Australia's jobs numbers. 1pm AEDT today is going to also be a big event for AUDUSD traders and global markets more broadly.
If I had to guess though, given the 19th National Congress is on and given PBoC governor Zhou was upbeat on growth in the past week I guess at decent results.
Either way, though this combination of data is going to be important for the Aussie dollar in the 24 hours, perhaps even week, ahead.
Turning to the charts now and the daily neatly highlights the comments and levels I've noted above. 0.7815/20 and 0.7897/7905 are the levels to watch.
Short term the 4 hour charts suggest 0.7860/65 could be the key to a quick run toward 79 cents with 0.7810/15 support.
It's unlikely to be an uneventful day for Australian dollar traders today.
Have a great day's trading.