AUD/USD rises following strong Australian employment data

AUD/USD rebounded on Thursday after three consecutive days of declines. This was supported by robust employment data from Australia, which bolstered the hawkish outlook on the Reserve Bank of Australia's (RBA) monetary policy.

Key employment data highlights

• Job creation: the Australian economy added 64.1k jobs in September, significantly surpassing the expected 25.0k. This marked improvement suggests strong economic momentum
• Unemployment rate: the rate held steady at 4.1%, aligning with expectations and underscoring the labour market's resilience
• Labour force participation: the participation rate rose to a record 67.2% in September from 67.1% in August, beating the forecast of 67.1%. This increase reflects a growing workforce, which could sustain consumer spending and economic activity

These indicators of labour market strength make it less likely that the RBA will opt for rate cuts in the near term. Additionally, RBA Deputy Governor Sarah Hunter emphasised the central bank's commitment to controlling inflation, which continues to be a concern amid sustained price increases. Analysts now suggest that the RBA is unlikely to cut rates until at least the first half of the next year, considering the tight labour market conditions.

Technical analysis of AUD/USD

The AUD/USD pair is extending its downward movement towards a target of 0.6645. After testing the resistance at 0.6700 from below, it continues its decline. Once the 0.6645 level is reached, a new consolidation range is expected to form above this level. A breakout above this range could initiate a corrective phase towards 0.6790. This bearish trend is supported by the MACD indicator, which remains below zero and points downwards, indicating sustained downward momentum.

On the hourly chart, AUD/USD has completed a downward wave to 0.6660, followed by a corrective rise to 0.6700. The pair is expected to continue its decline to the 0.6645 level. After this target is met, a potential reversal could push the price towards 0.6710. The Stochastic oscillator supports this outlook, with its signal line below 50 and heading towards 20, suggesting that there may be further downside before any significant recovery.