AUD/USD: Bulls take charge on 0.72 ahead of Aussie jobs - (Remember last time?...Well here we go again)

• AUD/USD is defying gravitational pulls and is stubbornly back from the 50% Fibo retracement level to test territory through 0.7220, getting set for the Aussie jobs data showdown.
• Aussie traders, hold onto your hats, AUD/USD is bound to be the centre of attention in Asia following last month's data showing that the Sep unemployment rate unexpectedly dropped from 5.3% - (However, we also have Fed Chairman Powell speaking as well as RBA deputy governor Debelle later in the day). 

AUD/USD is faring well considering that the markets are volatile with the VIX climbing as high as to 22.32 and the DJIA falling off a cliff yet again.

• Wall Street closes in red dragged by financials and technology

That, coupled with US CPI matching expectations and oil on its knees, might lead one to expect commodities, as a whole, to be feeling the pinch. However, commodities were higher and the complex held the line against a risk-off tone.

AUD/USD was recovering from 0.7190 in London and was spurred on after the UK Cabinet news, where a Brexit deal was finally signed off, helped lift the market's spirits. What was really weighing in the greenback was a sense that the Fed may need to reconsider its path of tightening with the price of oil so low within this current rout with the price of WTI making the 61.8% Fibo mark yesterday. Investors were also fleeing into the bond market which weighed on the US 10yr treasury yields that were falling in the afternoon to 3.09% and the lowest yield so far this month. The 2yr yields fell from 2.90% to 2.84 while the Fed fund futures yields repriced lower the chance of another rate hike in December at 70% (from 75%).

Speaking of the Fed, we will have plenty of Fed commentary today, including in today’s Sydney session, with Chairman Powell to discuss the economy from 10am Syd or 6 p.m. Eastern. Considering the performance of the DJIA of late, we might hear what the implications of Fed hikes will have markets and on the global economy. 

The main event for the Aussie

As far as the main event for the Aussie, its already been a busy week that is set to continue at 11:30am Syd/8:30am Sing/HK with the Oct labour force survey. Analysts at Westpac Banking Corporation noted that the Sep report generated many headlines and drew the RBA’s close attention as the unemployment rate unexpectedly dropped from 5.3% - where it had been for 3 months – to 5.0%:

"The weak 6k rise in employment was largely obscured in the upbeat narrative. Statistical noise is probably behind the consensus forecast of a rise to 5.1% despite an expected 20k rebound in jobs. This is also Westpac’s view, with the participation rate ticking back up to 65.5%." We then have RBA deputy governor Debelle participating in a panel discussion on “Assessing the Effects of Housing Lending Policy Measures” from 1pm Syd/10am Sing/HK.

AUD/USD levels

• Support levels: 0.7200 0.7160 0.7130.     
• Resistance levels: 0.7240 0.7300 0.7340.

Valeria Bednarik, Chief Analyst at FXStreet explained that the pair is ignoring dollar's strength on European jitters, also Wall Street's slump:

"Its currently holding on to gains and the 4 hours chart offers a neutral-to-bullish stance, with the pair above all of its moving averages, as technical indicators head nowhere around their midlines. The pair holds above the 38.2% retracement of its latest bullish run, capped earlier in the day by the 50% retracement of the same advance, now the immediate resistance, with gains above the level opening doors for an advance up to 0.7302 this month high."