AUD May Resist China Trade War Woes

AUD/USD had a hard time trying to break above 0.7140, but it was rejected on Thursday again losing almost 50 pips during the day.

While US-China wars are still on the agenda putting the Australian currency under pressure, there is a light in the end of the tunnel. The Australian employment data posted early in the morning continued to show underlying strength.

Full-time jobs added another 21K while the unemployment rate slipped to 5.0%. Overall, the employment trend participation rate stayed unchanged at 65.6 percent.

And in retrospective, trend employment increased by over 290,000 persons or 2.4 percent over the last year, which was above the average year-on-year growth over the past 20 years (2.0 percent).

What does it mean? It means that Australian labor market as well as economy on the whole feels pretty good despite all these Chinese trade war fears. Given the small size of the local economy, the recent sharp depreciation of the national currency may attract tourists and support service sector activity. It means there is more positive news ahead supporting the pair provided Trump keeps silence during all that time.

The next target for AUD/USD may lie at 0.7150 followed by 0.72 round number resistance level.

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