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AUD/USD – Aussie rebounds after surprise election win for PM Morrison

AUD/USD has started the week with considerable gains. Currently, the pair is trading at 0.6911, up 0.62% on the day. On the release front, there are no data releases out of the U.S. or Australia. Later on Monday, the RBA releases the minutes of the policy meeting earlier this month. On Tuesday, the U.S. posts existing home sales.

Australian employment numbers were mixed last week. The economy created 28.4 thousand jobs in April, marking a 3-month high and crushing the estimate of 15.2 thousand. However, the unemployment rate climbed to 5.2%, higher than the estimate of 5.0%. This is the highest level since August. Meanwhile, wage growth has remained fairly steady. Wage price index remained pegged at 0.5% for a second straight quarter. The key indicator has posted gains of 0.5% or 0.6% since the last quarter of 2016.

The Australian general election was a shocker, as Prime Minister Scott Morrison’s conservatives had been widely expected to lose to the center-left Liberals. Morrison had trailed badly in the polls throughout the campaign, but came from behind in stunning fashion to pull off the victory. The markets reacted favorably to the election results, and AUD/USD climbed as high as 1.0% on Monday. The pair is coming off a dismal week, falling 1.9%. This marked its sharpest decline since early February.

Federal Reserve Chair Jerome Powell will speak at an event on Monday, and there are a dozen Fed speakers at various venues during the week. Still, investors don’t expect to hear anything new from the Fed, which has said that the next rate move could be in either direction. The markets have priced in a rate cut later this year, and some analysts are predicting a second rate cut before 2020. This could take dampen enthusiasm for the strong U.S. dollar, as rate cuts would make the greenback less appealing to investors.

Australian & Indian Election results provide risk-on flows on mixed Asian open [1]

AUD/USD Fundamentals

Monday (May 20)

Tuesday (May 21)

*All release times are DST

* Key events are in bold

AUD/USD for Monday, May 20, 2019

Open: 0.6868 High: 0.6934 Low: 0.6868 Close: 0.6911

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.67686 0.6744 0.6825 0.6968 0.7085 0.7190

AUD/USD posted sharp gains in the Asian session. The pair edged higher in European trade but then retracted. AUD/USD has posted small losses early in the North American session.

Further levels in both directions:

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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