AUD/USD: shorts exposed to positive Aussie labor data

• Aussie shorts are at their highest so far in 2018.
• The unwinding of the AUD/USD shorts likely to gather pace on upbeat Aussie labor data.

Morgan Stanley's positioning tracker has AUD shorts at their highest so far in 2018 and the largest in G10, according to Reuters.

Thus, AUD/USD could rise sharply if the Aussie jobs data, due tomorrow at 01:30 GMT, blows past expectations, forcing the bears to switch sides.

The labor data are expected to show the Australian economy added 31.5K jobs in March vs 17.5K in February. Note, the headline figure could be misleading and a sustained rally in AUD will likely be seen if the full-time jobs surge. Also, a drop in the jobless rate (expected 5.4 percent, previous 5.6 percent) could put a bid under the Aussie dollar.

AUD/USD Technical Levels

The Aussie dollar has seen little action in Asia. As of writing, it is trading largely unchanged on the day at 0.7767. A clear break above 0.7791 (Tuesday's high) would open up upside towards resistance lined up at 0.7810 (April 13 high) and 0.7820 (descending trendline hurdle).

On the other hand, a break below 0.7759 (session low) could yield a pullback to 0.7738 (April 12 low + 10-day MA) and 0.7726 (April 5 high).