Australian Dollar remains under pressure despite stronger-than-expected jobs data
AUD/USD trims its losses on Thursday and trades around 0.7030 at the time of writing, down 0.15% on the day.
The Australian Dollar (AUD) experienced a slight bounce on Thursday, trading around 0.7030, as it faced a dip of 0.15% for the day. This improvement was primarily driven by strong job data from Australia, which reported a creation of 39.5K jobs in August, exceeding the anticipated 20K increase. However, this positive employment news came with an accompanying rise in the Unemployment Rate to 4.6%, surpassing expectations and the previous figure of 4.5%.
The employment data suggests the Reserve Bank of Australia (RBA) may consider a more restrictive monetary policy, given that a robust labor market could maintain inflationary pressures and limit the central bank's ability to ease policy. The US Dollar (USD) remained solidly supported by the bond market, with the 10-year US Treasury yield climbing to 5.15%, its highest level in nineteen years, which helped bolster demand for the Greenback and hindered the AUD/USD pair from recovering fully from its losses.
Meanwhile, the Bank of Cleveland Federal Reserve (Fed) President Beth Hammack indicated that US inflation remained high, while economic activity and demand were still robust, emphasizing concerns about persistent inflation risks and the difficulty of bringing inflation back to the Federal Reserve's target. As investors shift focus to the US-China President Donald Trump and Chinese President Xi Jinping meeting, the influence of this trade dialogue on the Australian Dollar is likely to be significant, considering Australia's strong economic ties with China.
In the one-hour chart, AUD/USD is currently trading at 0.7022, exhibiting a bearish short-term outlook as it remains below the 100-period simple moving average (SMA) at 0.7094 and the 200-period SMA at 0.7108. The 14-period Relative Strength Index (RSI) at 33.7 suggests ongoing, albeit not extreme, selling pressure. Traders should watch for immediate support at 0.7018, followed by a lower horizontal resistance level at 0.6984, where the pair could pause or realize profits.
Conversely, the next resistance levels are identified at 0.7075, the 100-period SMA at 0.7094, the 0.7105 barrier, and the 200-period SMA at 0.7108. Beyond this, a significant support barrier at 0.7140 is present, which AUD/USD would need to overcome to alleviate the current downward trend.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
