October labor market data for Australia was released on Thursday.
The unemployment rate amounted to 3.7% from the previous figure of 3.6%.
At the same time, the employment change rate amounted to 55K, compared to September's figure of 7.8K. The forecast estimate was at the level of 20K.
Thus, the actual value was 2.75 times higher than the forecast value. Such significant gaps between the forecast and actual values often cause high volatility and can lead to the formation of new trends.
The hot labor market could increase the chances of monetary policy tightening by the RBA. Or at least support the current restrictive conditions for a longer period of time.
It should be kept in mind that the next RBA meeting on the key rate will be held on December 5, and no more important Australian economic indicators are expected to be published until that date. In other words, today's high labor market estimates are the last hint to the market before the more than 2-week lull preceding the new decision of the bank.
And all this is taking place amid the prospect of policy easing not only in the US, but in general in North America, in particular — in Canada. The US northern neighbour’s actions are often in line with its southern partner, because it helps to balance the highly integrated economies of both countries.
This suggests that the AUDCAD pair could start an upward movement.
According to the AUDCAD daily chart, the pair is trying to break the resistance of the upper boundary of the descending channel. The nearest target is the level of 0.91.
If the mentioned resistance is broken, the target level could become a line of attraction for AUDCAD.
The final recommendation is to buy AUDCAD.
Profit could be fixed at the level of 0.91. Loss could be fixed at 0.855.
And in any case, it’s recommended to close the deal before December 5 — the RBA’s decision on the key rate release date.
This content is for informational purposes only and is not intended to be investing advice.
