18.04.201909:18 Forex Analysis & Reviews: AUD / USD: Australian ignores important releases and positive for China

The AUD/USD pair ignored data on the Australian labor market, which were published today during the Asian session. The release turned out to be rather contradictory but it was quite good as a whole since many parameters turned out to be better than expected. Yet, the Australian dollar froze in place and did not even try to overcome the key resistance level of 0.7200, which was the top line of the Bollinger Bands indicator on the daily chart.

Even the Aussie did not help another batch of positive rumors about the prospects for the US-China trade talks. All of these suggest that traders of this pair do not risk opening large positions on the eve of a three-day weekend. Tomorrow trading floors will be closed as the Catholic world celebrates Good Friday. But all the listed fundamental factors will still be won back, albeit with a time delay. Therefore, it is impossible to ignore the dynamics of the Australian labor market, even in the absence of any market reaction to published figures.

In general, today's release did not bring any surprises. Data on the labor market in Australia turned out to be slightly contradictory but on the whole, it was slightly better than forecasts. The unemployment rate rose to 5% as expected after an unexpected decline in February to 4.9%. The indicator was published from September to January at the 5% level. Thus, the current dynamics cannot be called negative. The increase in the number of employees was frankly positive as the indicator jumped to 25 despite the projected growth of up to 15 thousand. This is a very good result but it is far from the records of the last year. For example, a number of 38 thousand jobs were created in January compared to last year's figures of 39 thousand and 43 thousand for the months of November and August, respectively.

Part-time employment also showed a positive trend, which significantly exceeded forecasts. But, in my opinion, this result cannot be called a positive signal, since full-time positions offer a higher level of wages in contrast to those positions that involve part-time employment. This factor has a negative impact on the dynamics of wage growth and indirectly to the dynamics of inflation growth. After a reduction in February and in March, the partial employment rate jumped to 48 thousand. It is likely that this fact leveled the positive effect of the overall release.

However, the AUD/USD traders did not attach importance to either the positive or the negative sides of today's publication. This fact can still somehow be "justified", whereas ignoring the news regarding the prospects for a truce between the US and China looks somewhat abnormal. The fact is that yesterday in one of the influential American newspapers information was published about the course of negotiations between Beijing and Washington. According to the sources of the publication, it is now in full swing to sign a historic deal. At the moment, there are even indicative dates for signing the agreement. The parties are trying to have time to prepare and agree on the text of the transaction by May 27, when Memorial Day is celebrated in the US. The symbolism of this date is not quite clear since this day is dedicated to the memory of the American military.

However, according to another publication, Donald Trump and Xi Jinping may sign a deal a little later in June at the G20 summit, which will be held in Osaka. or the most part, it is not so important - where exactly the historic "truce" between the superpowers will take place. All information sources assure that the deal is almost 90% ready, although there are still two rounds of negotiations ahead. Thus, the US trade negotiator Robert Lightheiser will visit Beijing in a week while PRC representative Liu He will pay a return visit to the US in early May. According to preliminary data, the structure of the future agreement is ready. Presently, the parties are coordinating the legal details of the transaction.

It is worth recalling that in early April, Beijing and Washington agreed on a mechanism for implementing the trade agreement. This question has long been a stumbling block, according to the rumors. It was because of him that the March meeting of the leaders of the superpowers had to be postponed. Now, the parties agreed that the relevant authorities will be created in the countries to deal with the implementation of the terms of the transaction.

Thus, many factors which will give a general risk-taking on the good data on the Australian labor market, as well as the continuing growth of the commodity market. These will favor the growth of the Australian currency. The phlegmatic response of the AUD/USD pair to such a fundamental background suggests that traders are simply afraid to open large positions on the eve of the weekend. But at the same time, the potential for further growth of "Aussie" remains and will certainly be realized next week.