Today's employment data will make it more difficult (although not impossible) for the RBA to cut its cash rate in May. The Aussie Dollar reaction was instantly bullish.

Not only did the March jobs growth of 37,700 more than double the expected number, the previous two months were revised materially higher while the March number was skewed towards full time jobs. 31,500 of the new jobs were full time. The net effect was to see the unemployment rate back down to 6.1%

Numbers like these could easily see the RBA sit back and wait to see if this improved trend continues. They will be reluctant to fuel the Sydney housing market and cause more grief to self funded retirees if the job market continues to do better than expected.

GBPAUD

Surveying the charts that might be affected by a change of heart on Australian interest rates, GBPAUD looks interesting to me.

After a partial pull back into the body of a trend channel, today's rally in the Aussie has this pair approaching trend line support again.

It's doing this with the 14 day slow stochastic falling and well above the oversold zone, indicating potential for ongoing downward momentum. This contrasts with other tests of this support which happened when the stochastic was oversold (see arrows)

Looking at the potential for an ab=cd pattern or ab*1.27=cd pattern, suggests the possibility for a break of the trend line this time, with a move back towards 1.885 or 1.868.

GBPAUD CFD Daily Click to Enlarge GBPAUD CFD Daily
Click to Enlarge