February 20th 2020
The Australian employment report delivered a strong headline figure, but the unemployment rate increased for the second consecutive month. Forex traders booked profits, pressuring the AUDUSD to the bottom of a critical horizontal support area. Price action recovered slightly, as US economic data is awaited. How will this currency pair react as the trading day matures? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Initial jobless claims are predicted to remain stable nears its four-week moving average, but forex traders may react to a regional economic indicator following an upward surprise earlier in the trading week. The US Democrat’s presidential race is closely followed to determine who will run against incumbent President Trump in November. Will bulls rally the AUDUSD, or can bears succeed in a breakdown? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Employment Report: The Australian Employment Change for January was reported at 13.5K. Economists predicted a figure of 10.0K. Forex traders can compare this to the Australian Employment Change for December, which was reported at 28.7K. The Unemployment Rate for January was reported at 5.3%. Economists predicted a reading of 5.2%. Forex traders can compare this to the Unemployment Rate for December, which was reported at 5.1%. 46.2K Full-Time Positions were created and 32.7K Part-Time Positions were lost in January. Forex traders can compare this to the loss of 1.8K Full-Time Positions and the creation of 35.5K Part-Time Positions, which were reported in December. The Labor Force Participation Rate for January was reported at 66.1%. Economists predicted a reading of 66.0%. Forex traders can compare this to the Labor Force Participation Rate for December, which was reported at 66.0%.
- RBA FX Transactions: RBA FX Transactions for January were reported at A$769M. Forex traders can compare this to RBA FX Transactions for December, which was reported at A$1,985M. RBA FX Government Transactions for January were reported at A$772M and RBA FX Other Transactions were reported at A$5,499M. Forex traders can compare this to RBA FX Government Transactions for December, which were reported at -A$2,062M and to RBA FX Other Transactions, which were reported at A$3,544M.
- Chinese 1-Year Loan Prime Rate and Chinese 5-Year Loan Prime Rate: The Chinese 1-Year Loan Prime Rate for February was reported at 4.05% and the Chinese 5-Year Loan Prime Rate was reported at 4.75%. Economists predicted a figure of 4.05% and 4.75%. Forex traders can compare this to the Chinese 1-Year Loan Prime Rate for January, which was reported at 4.15% and to the Chinese 5-Year Loan Prime Rate, which was reported at 4.80%.
Here are the key factors to keep in mind today for US Dollar trades:
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of February 15th are predicted at 210K and US Continuing Claims for the week of February 8th are predicted at 1,717K. Forex traders can compare this to US Initial Jobless Claims for the week of February 8th, which were reported at 205K and to US Continuing Claims for the week of February 1st, which were reported at 1,698K.
- US Philadelphia Fed Business Outlook: The Philadelphia Fed Business Outlook for February is predicted at 11.0. Forex traders can compare this to the Philadelphia Fed Business Outlook for January, which was reported at 17.0.
- US Leading Index: The US Leading Index for January is predicted to increase by 0.4% monthly. Forex traders can compare this to the US Leading Index for December, which decreased by 0.3% monthly.
Should price action for the AUDUSD remain inside the or breakout above the 0.6600 to 0.6670 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6625
- Take Profit Zone: 0.6815 – 0.6875
- Stop Loss Level: 0.6565
Should price action for the AUDUSD breakdown below 0.6600 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6565
- Take Profit Zone: 0.6420 – 0.6470
- Stop Loss Level: 0.6600
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