The AUD/USD is on the edge since 18th March this year after the tremendous surge in commodity prices and discouraging data on US jobs. It is currently trading at 0.7840 which is a little bit less than 0.7862, its highest level on Friday.
Upsurge in commodity prices
Australia has an immense number of natural resources such as coal, copper, and iron ore. The Australian dollar tends to do well when commodity prices rise. The prices of its vital commodities currently surged as demand from China and other Asian countries remained unaltered.
Iron ore futures surged more than 10% recording an inflation in the gains made since March last year. Recently, the prices moved above A$200 for the first time on record. Bloomberg Commodity Index (BCOM) has also risen close to its highest point.
Other commodities that have jumped to a high record are copper and crude oil. This has greatly influence various countries’ economies. Many market participants have cited the current gains to the ongoing shift of copper’s vital role to green energy.
Australia retails volume
The AUD/USD is also holding steady after the latest Australian retails’ sales numbers. According to the Bureau of Statistics, the country added precautions to curtail the virus thus experiencing a 0.5% sales decline.
The volume rose by 2.4% later last year. Online sales represented about 9.4% of total retail sales. State falls were largely impacted by lockdown periods followed by restricted trade in December last year. This trend is most likely to continue as the country recovers from the corona virus pandemic.
Meanwhile, the AUD/USD pair is also reacting to the disappointing jobs data from the United States. Hiring was a huge letdown in April with NFP increasing by much less than 266,000. Unemployment rate rose to 6.1% amid an escalating shortage of available workers.
Unemployment rate later peaked at 22.9% in April 2020 as the headline jobless rate hit 14.8%. following the weak US job numbers, the pair will likely retreat slightly and later embark on the upward trend.
AUD/USD support and resistance
Support 1: 0.7800
Support 2: 0.7750.
Resistance 1: 0.7900
Resistance 2: 0.7950.