AUD/USD Current Price: 0.6341
- Australian employment data came in below expectations.
- The US dollar weakened after US data and Powell's speech but remains firm.
- The AUD/USD pair continues to trade near crucial support, with limited upside potential.
During the American session, AUD/USD rose, supported by a weaker US dollar and a rebound in commodity prices. These moves offset the decline following Australian data and market jitters.
Employment in Australia rose by less than expected in September, with an increase of 6,700 jobs compared to a forecast of 20,000. However, the Unemployment Rate dropped from 3.7% in August to 3.6% in September.
The jobs data initially weighed on the Australian Dollar, causing it to decline. However, the Aussie managed to recover. Against the Kiwi it is rising for the fifth consecutive day, with AUD/NZD reaching one-month highs around 1.0850. No major data releases are expected from Australia on Friday. China is expected to keep loan rates unchanged.
Economic data from the US came in mixed. Initial Jobless Claims dropped below 200,000, indicating a still tight labor market, while housing data exceeded expectations but suggested a softening market. Federal Reserve Chair Jerome Powell mentioned that inflation remains the main risk and suggested the Fed will not raise rates further unless stronger evidence of economic growth complicates bringing inflation under control.
US yields pulled back modestly but remain near multi-year highs. Investor sentiment appears uneasy due to geopolitical tensions, higher interest rates for longer, and the rally in crude oil prices, making the outlook for a sustainable recovery in AUD/USD complex.
AUD/USD short-term technical outlook
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The AUD/USD has rebounded from near the key support level of 0.6285, but the overall trend remains bearish as the price sits below the 20-day Simple Moving Average (SMA). The daily chart shows mixed signals, offering no clear direction.
On the 4-hour chart, the pair is above the 20-period SMA, and technical indicators show some potential for an extension to the upside. The immediate resistance level stands at 0.6355. A break higher could lead to an initial target at 0.6375, and further gains would shift the focus to the resistance area around 0.6390. Breaking above that level could add more strength to the Australian Dollar, potentially rallying towards 0.6430.
A decline below 0.6330 would weaken the outlook for the Aussie ahead of the Asian session. However, as long as the pair remains above 0.6285, losses are limited. Breaking below the year-to-date low at 0.6285 would open the doors for a test of the 2022 low at 0.6170. Prior to that level, there is support initially at 0.6250.
Support levels: 0.6330 0.6310 0.6280
Resistance levels: 0.6355 0.6390 0.6430
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