Global macro overview for 16/02/2017:
The Australian January employment data surprised the market participants. The unemployment rate dropped slightly to 5.7% from 5.8% a month ago and the employment change dropped from 16.3k to 13.5k (9.7k was the expected figure for the last month). This is rather a disappointing update on the labor market because there is the only small improvement in the unemployment rate over the past 12 months. The gap between part-time and full-time employment does not look good and it might suggest the labor market has lost steam. Nevertheless, the leading indicators of employment continue to suggest somewhat better jobs growth over coming months, so the Reserve Bank of Australia should remain on hold regarding the interest rate decision.
Let's now take a look at the AUD/USD technical picture at the daily time frame after the data were released. The price is trading just below the long-term technical resistance at the level of 0.7777 in overbought market conditions. Moreover, the growing bearish divergence between the price and the momentum oscillator indicates a corrective cycle coming soon. In that case, the most important level for the bulls is the technical support at the level of 0.7606. Any sustained violation of this level might lead to bigger corrective move.
