Last night eco data out of Australia showed that the wage price index rose at 0.4% vs. 0.5% eyed while the yearly data rose only 1.9%. This was the weakest reading on record and suggested that consumer demand may be tempered. With wages and inflation muted, speculation is starting to heat up that the RBA may need to ease in near future.

This has put pressure on Aussie from all sides. A cut in rates would only accelerate the carry trade liquidation move which has been in full bloom ever since US yields have skyrocketed. A rate cut by the RBA would be like adding salt to the wound as it would compress the rate differential between the two currencies even further.

That’s why tonight’s AU employment data is so important. The market is looking for a rise of 20.3K jobs versus a fall of -9.8K jobs the month prior. But if the data surprises to the downside for the second month in a row, the Aussie could break the key .7450 support and fall out of it long held range to start a new downtrend move.