Forex Market: AUD/USD trading forecast for November 9th

Friday’s trade saw AUD/USD within the range of 0.7018-0.7171. The pair closed at 0.7048, plummeting 1.34% on a daily basis, or at the most considerable rate since October 13th, when it depreciated 1.60%. It has been a third consecutive trading day of decline. The daily low has been the lowest level since October 2nd, when the cross registered a low of 0.7000. In weekly terms, AUD/USD lost 1.27%, marking its fourth consecutive week of decline and also the sharpest one since the week ended on September 27th, when it plunged 2.30%.

US dollar gained ground sharply against its major peers on Friday, after the Bureau of Labor Statistics said US employers in all sectors of the economy with the exception of the farming industry added 271 000 jobs in October, a figure far beyond what analysts had projected. It has been the most considerable gain in jobs since December 2014, when 329 000 job positions were added. Septembers figure has been revised down to 137 000 from a job gain of 142 000 reported previously. At the same time, the rate of unemployment fell 0.1% to reach 5.0% in October, or the lowest level since April 2008. The strong employment numbers may bolster the view that the Federal Reserve Bank will take action and hike borrowing costs at its final meeting for the year on December 15th-16th.

On Monday (November 9th) AUD/USD trading may be influenced by a number of macroeconomic reports as listed below.

Fundamentals

Australia

ANZ Job Advertisements

At 0:30 GMT on Monday the Australia and New Zealand Banking Group (ANZ) will publish data regarding the number of job advertisements in Australia in October. It encompasses advertisements in the major metropolitan newspapers and on the Internet sites. The corresponding index, based on a survey by ANZ, climbed 3.9% in September compared to August, following another 1.0% surge in the preceding month. Septembers gain in advertisements has been the sharpest one since June 2014, when a gain rate of 4.4% was reported. This indicator is used for projecting growth in employment in Australia, as it reflects labor market conditions in the future. An increase in the number of jobs would have a limited bullish effect on the Australian dollar, while a decrease would have the opposite effect.

United States

Federal Reserves Labor Market Conditions Index

At 15:00 GMT on Monday the Federal Reserve Bank is to report on its Labor Market Conditions Index regarding October. In September the gauge slipped to a zero value from 2.1 in the prior month. This index is derived from 19 labor market indicators, as the unemployment rate and the private payrolls are considered to be of the greatest importance. The gauge also encompasses the labor-force participation rate, as well as indicators concerning wages, hiring and dismissals. A reading above the key 0.0 level suggests labor market activity is improving, while a value below it is a signal for worsening conditions. Therefore, readings above 0.0 are usually dollar positive.

Correlation with other Majors

Taking into account the week ended on November 8th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to GBP/USD (0.8787, or very strong)
AUD/USD to EUR/USD (0.8233, or very strong)
AUD/USD to NZD/USD (0.6844, or strong)
AUD/USD to USD/CHF (-0.8726, or very strong)
AUD/USD to USD/JPY (-0.8979, or very strong)
AUD/USD to USD/CAD (-0.9623, or very strong)

1. During the examined period AUD/USD moved strongly in one and the same direction with NZD/USD.

2. AUD/USD moved almost equally in one and the same direction with EUR/USD and GBP/USD during the week.

3. AUD/USD moved almost equally in the opposite direction compared to USD/CHF, USD/JPY and USD/CAD during the period in question. This relationship has been the most pronounced between AUD/USD and USD/CAD.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7079
R1 – 0.7140
R2 – 0.7232
R3 – 0.7293

S1 – 0.6987
S2 – 0.6926
S3 – 0.6834

By using the traditional method of calculation again, the weekly pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7097
R1 – 0.7176
R2 – 0.7304
R3 – 0.7383

S1 – 0.6969
S2 – 0.6890
S3 – 0.6762