Australia's seasonally adjusted unemployment rate was recorded at 6.4 per cent in January, say the Australian Bureau of Statistics (ABS). The labour force survey for the last month posted better-than-expected results, which is welcoming news for the Reserve Bank of Australia.
The preliminary market forecasts were anticipating headline unemployment to drop to 6.5 per cent from December's 6.6 per cent, yet, the comparatively larger reduction of unemployment elucidates the strength of Australia's recovery.
Nevertheless, the labour market was able to add fewer jobs than initially projected. According to ABS' labour force survey findings, 29.1 thousand new jobs were created in January vs 30.2 thousand expected. In comparison, 50 thousand were added a month prior.
The global recovery continues to be solid, albeit uneven. Gross output is rising, being stimulated partly by an uptick in consumer demand. The recovery process continues to be underpinned by investors' flight from lower-risk securities, owing to the historically low yields in the U.S., towards higher-risk assets.
This process is additionally being crystallised by growing energy prices, which is likely to continue affecting the global economy throughout the first and second quarters.
Meanwhile, the Australian dollar did not react to the employment data very noticeably. As can be seen on the 4H chart below, the aussie continues to be performing strongly against the greenback.
The AUDUSD had completed a Falling Wedge pattern recently, which means that the bullish trend is likely to persist in the foreseeable future, despite the recent strengthening of the U.S. dollar.
The pair is currently consolidating in a tight range spanning between the major resistance level at 0.78000 and the major support at 0.77000. The underlying price action remains trading above the 50-day MA (in green), which illustrates the remaining strength of the bulls.
Nevertheless, the short-term momentum is becoming increasingly more bearish, as demonstrated by the MACD indicator.