The Australian dollar tumbled further against the US dollar on Friday, after the daily Japanese candlestick posts a bearish outside range day on the 31 March, which initiate the call from the close under US$0.6075.
A bearish engulfing pattern is a technical chart pattern that entails two candlesticks that are formed generally at the end of an uptrend, or near a potential resistance.
Initially, the AUD/USD pair got a short burst of upward momentum on Friday following a much larger-than-expected contraction of ‘Non-Farm Payrolls Number’, ending a record 113-month streak of job growth.
The U.S. economy lost 701,000 jobs in March, according to Friday’s report from the Labor Department, much more than the 100,000 decline economists had forecasted.
Given that the report only includes data through March 14, missing two weeks in which 10 million Americans filed for unemployment, many had thought the report wouldn’t be so bad.
The unemployment, meanwhile, rose from the previous months reading at 3.5% to 4.4%, crushing the 3.8% forecast; however, the average hourly earnings (m/m) came in better at 0.4% from the 0.2% forecast.
Meanwhile, The White House economic advisor Larry Kudlow denied that the U.S. was considering rolling back tariffs against China triggered a modest retreat from the earlier gains posted.
Looking back to the technical aspect, any renewed upside challenge will likely experience a lack of demand near the US$0.6055 to US$0.6125 resistance.
The call currently holds for a re-challenge of the support located at US$0.5885-95. Reassess from there.
On Tuesday, is the Reserve Bank of Australia (RBA) board meeting where they are expected to leave the cash rate at 0.25 per cent.