Australian unemployment surged in May and a huge chunk of jobs were lost as ongoing restrictions to prevent the spread of the corona virus kept large parts of the economy shuttered. The seasonally adjustments estimates are “Employment decreased 227,700 to 12,154,100 people, Full-time employment decreased 89,100 to 8,540,000 people and part-time employment decreased 138,600 to 3,614,100 people, Unemployment increased 85,700 to 927,600 people, Unemployment rate increased 0.7 pts to 7.1%, Underemployment rate decreased 0.7 pts to 13.1%, Underutilisation rate increased less than 0.1 pts to 20.2%, Participation rate decreased by 0.7 pts to 62.9%, Monthly hours worked in all jobs decreased 12.1 million hours to 1,604.7 million hours.”

Reserve Bank of Australia highlights the potential for the economic downturns to be “shallower than earlier expected” as lockdown restrictions are relaxed and the economy started restructuring. The main question now is how many workers will be kept employed when the government subsidy keeping workers tied to firms expires in September.

“Households that were already receiving welfare payments had received additional payments, and the Job Keeper program and increased Jobseeker payments had supported incomes for others,” the RBA said in minutes of its June policy which was released by Tuesday.

“The Board determined that it would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the target band,” RBA’s meeting minutes showed.

In US, Employers hired a record of 2.5 million workers in May as businesses reopened after shuttering in mid-March to slow the spread of COVID-19 which boosted the US market. Along with that, the Retail Sales data and Powell optimistic approach strengthens the safe haven assest.

AUD/USD 4 Hours Chart:

Support: 0.6849 (S1), 0.6815 (S2), 0.6779 (S3)

Resistance: 0.6920 (R1), 0.6956 (R2), 0.6990 (R3).

Even though RBA’s minutes were positive but Australian unemployment surge did not give confidence among the Aussie traders. We expect a Bearish trend for the pair.