Trading plan for 04/05/2018

Traditionally, on the day of the report on the US labor market, financial markets are in a state of calm anticipation, and today it was even easier with a day off in Japan. USD slightly lost in relation to AUD, JPY and SEK, but NZD is doing the worst today. However, the changes are small, within 0.25%. The stock market in Asia is dominated by falls, flat trading is related to oil and gold.

On Friday 4th of May, the main event of the day will be the US job market data release in form of NFP-Payrolls, Average Hourly Earnings Unemployment Rate, and Participation Rate. Moreover, is it worth to keep an eye on the bunch of Services PMI data release from the Eurozone as well.

AUD/USD analysis for 04/05/2018:

The Reserve Bank of Australia has issued the Monetary Policy Statement from its last meeting. AUD found little relevant information in the RBA report. The bank has maintained inflation forecasts, though with downward correction of 3.0%. Some support to this confident growth outlook relative to February is that the forecasts include more stimulatory financial conditions with the AUD TWI 3% lower than in February and interest rates not expected to rise until the middle of next year. Forecasts for the exchange rate and 11% upward for oil prices one would expect a higher CPI projection. This suggests the RBA's doubt in inflationary pressure as the inflation and unemployment forecast changes seem somewhat inconsistent. This might result in tightening the monetary policy over the course of 2018 and 2019 and further AUD depreciation.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market has retraced 23% of the previous swing down after the local bottom has been found at the level of 0.7472. The key technical resistance is seen at the level of 0.7578 - 0.7589, so any bullish rally must break above this level in order to sustain the growth. So far neither the momentum nor the market conditions are supporting the move up, so the price might now consolidate horizontally for some time.