The AUD/USD surged to a fresh yearly high of 0.9052 following the unexpected drop in unemployment and has moved than 120% of its daily ATR, while the USD/JPY remains little changed on the day after slipping to a low of 88.14.
The AUD/USD surged to a fresh yearly high of 0.9052 following the unexpected drop in unemployment, and the Australian dollar remains the best performing currency against the greenback as the exchange rate jumps to its highest level since August 2008. However, aussie-dollar has moved more than 120% of its average true range and looks to be finding intraday resistance near 0.9050, and we may see the exchange rate trend lower during the North American trade as the 30-minute RSI falls back from overbought territory. Nevertheless, the rise in global equities paired with higher commodity prices is likely to support the AUD/USD rally as market sentiment improves, and the aussie-dollar may continue to retrace the decline from the previous year as investors anticipate the Reserve Bank of Australia to tighten policy going forward.
The Japanese yen pared the overnight advance against the U.S. dollar and remains little change from the previous day however, the USD/JPY may continue to trend lower as the greenback loses ground across the board. As the pair fails to hold above the 100-SMA at 88.61, we may see the exchange fall back towards the 88.00 level as the pair continues to search for a bottom, and the dollar-yen may hold the sharp downtrend from August as the greenback gains momentum as the top funding currency. As the Federal reserve pledges to hold borrowing costs at the record-low for some time in order to stem the risks for a slower recovery, the dovish outlook for future policy supports a bearish outlook for the USD/JPY, and the pair may continue to retrace the advance from earlier this year over the coming weeks.