Halister News

(Bloomberg) -- Aussie dollar may extend its rally if January jobs data reveals the fourth straight month of full-time employment gains and that more youths are finding work, Bloomberg strategist Michael G Wilson writes.

• Australia’s full time employment index may post its fourth consecutive gain on Thursday, matching the positive run seen in Sept. 2015 which saw the AUD climb about 2% over 4 months
  • NAB business conditions survey on Feb. 14 saw the employment component soaring to its best level since 2011
• AUD/USD currently at 0.7657; initial test seen at 0.7778 Nov. 8 high; slow stochastic %K seen consolidating at or above 75 in February, suggesting bullish momentum intact
• AUD/NZD may revisit a series of declining highs that began at 1.0772 on Oct. 14; spot currently steady at 1.0701
  • Slow stochastic in overbought territory at 91; broken trend-line resistance with support now at 1.0524 100-DMA
• Australia employment data due on Feb. 16 may show 10k jobs added in January following a 13.5k gain in December, according to median est. of 29 economists in Bloomberg survey
  • Estimated range: -11k to +28k
  • Unemployment rate seen steady at 5.8%
• December employment saw the sector for 15-24 year-olds register its first increase in three months
  • Sector is constant source of frustration for govt; a second monthly increase in January would be reflective of a broadly improving theme
• Risks to the bullish Aussie view include:
  • Narrowing Aussie/U.S. rate differential if Yellen, Dudley or Fischer reiterate the hawkish tone set by the Fed chair Tuesday following a possible strong U.S. CPI print Thursday
  • Weak local jobs print that comes in the form of strong headline number built mainly on increase in part-time labor
  • Under such outcome, immediate triple-top resistance near 0.7700 may hold

• NOTE: Michael Wilson is an FX strategist who writes for First Word. The observations he makes are his own.