Despite the US dollar finding support after multiple days of weakness, the AUDUSD currency pair found support of its own, using the solid Australian labour report to maintain its upward momentum. As the uptrend approaches resistance, could a breakout be on the cards in the upcoming sessions? 

Australia’s unemployment rate on Wednesday remained stationary at 3.5%, despite consensus for an uptick to 3.6%. Additionally, the employment change of 32.6K came in more than twice as high as the 15K consensus, delivering a second consecutive upside surprise in monthly labour data. The increase comes on the back of a stellar 76.6K employment change in the prior month. The tight labour conditions are a tough challenge for the RBA to navigate, as upward pressure on wages and inflation could open the door for additional hikes in the upcoming monetary policy meetings.  

Technical 

On the 1D chart, an ascending triangle is emerging, with the Thursday rally breaking through the daily pivot resistance at $0.6781, signalling short-term upward momentum. However, with crucial resistance lying ahead, the momentum could face a stiff test. 

The resistance of the triangle is established at $0.6897, the Fibonacci golden ratio from the late May bottom. The market has hesitated twice at this resistance, but a breakout from the triangle could catalyse a sustainable uptrend toward $0.6940 and $0.6997. 

However, if resistance holds, the market could correct toward support at $0.6719 and continue within the triangle, where lower support is established at $0.6721. A breakdown at the triangle could bring the $0.6672 level back into play.  

Summary 

The AUDUSD currency pair received a welcome boost from the strong Australian labour reports, with the price action edging closer to the triangle support at $0.6897. A breakout could trigger an uptrend toward $0.6940, whereas a correction at the resistance could force a pullback toward support at $0.6719. 

Sources: Koyfin, Tradingview