Releases from Australia:

April                           Forecast    Actual
Employment Change      10.0K      25.4K
Unemployment Rate       4.1%       4.2%
Participation Rate          65.2%     65.4%

The Australian employment data came as quite a surprise following the amount of gloom and doom that has surrounded releases. The rise in the number of employed was more than double forecasts at +25.4K and still shows that the current situation is still basically healthy in the country with most gloom coming from future outlook.

However, despite the rise in employed the actual unemployment rate also rose by 0.1% to 4.2% due to the participation rate rising to 65.4%. Overall the numbers are positive but with business and consumer confidence on the wane the figures should worsen over the year.

The following economic releases are due today:

March
German Trade Balance              EUR    17.0bn
German Industrial Production   (MoM)   - 0.5%
German Industrial Production    (YoY)   +5.0%
U.S. Wholesale Inventories                  +0.5%

April
Swiss Unemployment Rate                    2.5%
U.S. Continuing Claims            (26th) 

May
U.S. Initial Jobless Claims          (3rd)     375K

The Bank of England and European Central Bank are due to announce their rate decisions

I shouldn’t have looked for a final dip in the Dollar before the move back higher. The resistance levels I outlined held briefly but then broke and this led to a retest of last week’s highs and slightly further against the Euro and much further against the Pound. There should be further to go but I feel we’re pretty close to a short term high which should cause a pullback but at this point it should just be a correction to be followed by further gains.

In the larger picture the break below 1.5340 Euro does represent a break of the last daily swing low, technically does break the series of higher lows and higher highs in the uptrend and thus imply a larger reversal is implied. However, the reversal shouldn’t be direct as a correction should be forthcoming following the next Dollar rally.

If I am wrong on this it does raise an interesting pattern. The rally this year from 1.4437 to 1.6018 came in 3 months. Any persistent direct losses would raise the alarm bells for a possible spike top and thus we could see a move all the way back down to the 1.43-1.44 area again… Let’s wait for that before getting too excited…

One of the reasons I do not expect a spike top is the situation in Cable. The break down revives my original thought that we should see a move back to the 1.9335 area again. It could overshoot slightly but the cyclic position here is not yet bearish enough and I suspect that it would lead to a recovery that could reach as high as the 2.0192 high again…

So first thing, take care about getting too bullish Dollars from the outset. It seems to make sense with the BOE & ECB rate decisions coming around late European morning and this could be where the correction lower will come. Once this is out of the way the next leg higher is possible.

Note important support and resistance areas:

          USDJPY         EURUSD       USDCHF       GBPUSD
Res:  105.25-57    1.5440-65    1.0763-13    1.9710-45
Res:  104.70-91    1.5335-65    1.0623-48    1.9590-30

Spt:   104.01-20    1.5258-70    1.0500-25    1.9441-70
Spt:   102.84-26   1.5154-86     1.0373-26    1.9335-61

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