Drop in Aussie full time jobs takes a wind out of AUD/USD bulls

AUD/USD remains bid, but is struggling to extend gains beyond 0.7950 levels as the data released in Australia showed an unexpected drop of 20.3K in the full time jobs in July. 

The economy added 27.9K jobs, beating the estimated figure of 20K. The June figure was revised higher to 20K from 14K. Meanwhile, the jobless rate came-in at 5.6% as expected. The part time jobs registered a growth of 48.2K in July compared to the prior month’s drop of 48.0K. 

Bond yield spread remains unchanged

The upbeat headline figure is good news; however, the dismal full time jobs number is playing spoil sport.  This is evident from the fact that the spread or the difference between the Aussie 10-year bond yield and the US 10-year Treasury yield remains unchanged at the pre-data level of 42 basis points. Thus, the spot too remains largely unchanged around the pre-data figure of 0.7935. 

AUD/USD Technical Levels

A break above 0.80 [psychological hurdle] would open doors for 0.8043 [Aug 1 high] and 0.8066 [July 27 high]. On the downside, breach of support at 0.7886 [5-DMA] could yield a pullback to 0.7839 [Aug 11 low] and 0.7808 [Aug 15 low].