All eyes will be turned on the Australian Dollar in few hours, as traders awaits the labor market figures from Australia tonight.

The Employment change is expected to decline significantly towards -10.0K in December compared to a strong jobs creation seen in November, as the Australian economy added 71.4K fresh jobs during that month.

In addition, economists see December unemployment rate up by 0.1% to reach 5.9% against 5.8% in November. In the meantime, the participation rate is likely to decline slightly to 65.2% in December compared to 65.3% previously.

In sum, the market participants have a bad reading for the coming releases, which kept the Australian Dollar under pressure since the Beginning of this month.

In the other side, and from a trading standpoint, traders should be very careful as analyst’s estimates are too pessimistic and consequently, positive figures should push the Aussie strongly higher in the near-term.

Looking at the technical picture, and beginning with the monthly chart:

The Aussie fell sharply in 2015 after breaking below 0.8100 major support.

Prices plunged to as low as 0.6896 level in September before to find a bottom, which appear to be temporary.

The pair has tested a major bullish trendline that come from 2001 lows, which provided strong support to the pair.

Actually, and despite the decrease in the bearish momentum recently, our view remain negative on this pair and we are looking for another extension lower to begin during 2016.

Technically, traders should watch 0.7500 level as it represent the monthly bearish pivot and as far as prices keep trading below this level, the downside pressure should stay unchanged.

Long-term support stands at 0.6000 level and we believe that any bounce in the pair is likely to be short-lived until this level is reached.

If the pair break above 0.7500 in the next months, then we will consider this move as a larger correction before the sell-off resume.

Meanwhile, in the short-term, our view is flat and we believe that the pair has two paths to follow ahead of the Australian jobs figures.

As we can see, the pair tried to break above 0.7035 hourly resistance but failed, reinforcing the downside risks.

The view remains bearish as far as 0.7075 peak is intact and the pair should heading south from the current levels towards 0.6900 psychological support. In the other hand, if the figures come higher than expected, we can see a rally towards 0.7070-0.7105 zone as shown in hourly chart below, before to see heavy sellers again.

 

 

 

 

 

 

 

 

 

 

 

 

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