Could We See 1.30 in EUR/USD?
Forex markets continued mostly with the trends that have been firmly established in recent weeks, as the US Dollar continues to make headway against most of its major trading counterparts. The central question most forex traders are asking as this point is whether or not these moves can continue past the summer trading period, which is when historical volatility tends to slow to some of its weakest levels of the year.
This essentially means that the same trends might not be in place once the forex market liquidity comes back to full strength and a larger number of traders are able to make their influence felt in market prices. But it is important for trader to continue watching the real data, as well. And one of the more missed areas of the market last week could be seen in the Australian Dollar, where key macro releases helped to shed some light on the commodity currency’s likely trajectory over the next quarter.
Weekly Data Influencing the AUD/USD
Specifically, the monthly Employment Change in Australian came with a Market Estimate of 13.2K new jobs for the month. This expectation was slightly below the previous number of 15.9K, and an indication that the Australian Bureau of Statistics data shows that the economy is weakening in the summer months. The Employment Change rate measures the change in the number of employed people, and employment creation is an essential leading indicator of consumer spending, which is responsible for a majority of overall economic activity.
At the same time, forex traders are left to asset the Australian Unemployment Rate, where Market Estimate showed no changes at 6.0%. This Unemployment Rate gauges percentage of the total unemployed work force who were keenly looking for jobs during the previous market. The total figure of unemployed people is a vital signal of general economic health as consumer spending is highly associated with labor-market situations. These numbers are some of the best in the developed world, so if these trends continue forex traders should be able to find new opportunities in the AUD/USD once carry trades start to gain better focus in the market.
The Week Ahead in Forex Markets: Could the EUR/USD Hit 1.30?
In the week ahead, forex traders will need to assess the broader momentum that is being seen in the major pairs. Some big moves have been seen in the AUD/USD over the last few trading sessions but there is still scope for the EUR/USD to hit 1.30 before the end of this month. Key drivers in a move like this could be seen if political tensions in Gaza and the Ukraine continue to make headlines, so forex traders will need to remain cognizant of the risk developments in these areas as they still have the potential to support the US Dollar through risk aversion.