Key Points:
- AUD/USD is trading at 0.66498, down 0.03%, after Australian jobs data disappointed.
- August employment fell by 5,400, versus a forecast gain of 21,500.
- The unemployment rate stayed at 4.2%, but participation dipped to 66.8%.
- The market sees a 20% chance of a September RBA cut, rising to 70% by November.
The Australian dollar edged lower on Thursday, holding just below 0.665 after a weaker-than-expected jobs report shook confidence in the labour market’s resilience.
Net employment fell by 5,400 in August, well below the consensus forecast for a 21,500 gain. The drag came almost entirely from full-time employment, which dropped by 40,900 positions—a worrying signal that underlying momentum may be stalling.
While the unemployment rate held steady at 4.2%, the participation rate slipped to 66.8%, indicating a marginal reduction in the number of people actively seeking work.
Taken together, the data paints a picture of a labour market that is losing steam, albeit slowly.
Despite the miss, the market still sees the Reserve Bank of Australia (RBA) standing pat in September, with just a 20% chance of a rate cut priced in.
That number, however, jumps to 70% for the November meeting, as inflation remains above target and policymakers maintain a cautiously hawkish tone.
Fed’s Measured Tone Adds Global Pressure
In the US, the Federal Reserve followed through with a widely expected 25-basis-point cut but signalled only two more this year and a single cut in 2026.
Chair Jerome Powell emphasised a “risk management” approach, opting to avoid rushing into further easing.
For the Aussie, the Fed’s stance means global yield differentials may narrow more slowly than anticipated. That removes one potential tailwind for the currency, especially if the RBA moves to cut ahead of the Fed.
Technical Overview
The Australian dollar (AUD/USD) is trading at 0.66498, showing a minor dip of 0.03%, but overall momentum remains bullish. Since rebounding from the April low of 0.59214, the pair has been in a steady uptrend, supported by higher lows and consistent buying pressure.
The recent breakout above the 0.6600 handle has pushed the currency towards its next resistance near 0.6650–0.6700.
From a technical standpoint, price action is well-supported by the moving averages, which continue to slope upward. The MACD remains in bullish territory, with the histogram showing rising momentum, suggesting buyers are still in control despite today’s slight pullback.
Looking ahead, immediate resistance is seen at 0.6700, and a decisive break above this level could extend gains towards 0.6800.
On the downside, initial support lies at 0.6500, with stronger protection around 0.6400. Unless the pair falls back below these zones, the broader outlook remains constructive for further upside.
Cautious Forecast
In the short term, AUD/USD is likely to consolidate between 0.6600 and 0.6660 as traders reassess RBA and Fed dynamics.
A sustained break above 0.6655 could push the pair toward 0.6700, but that may require either a soft US data print or a more dovish tone from Australian policymakers.
In the medium term, odds favour moderate upside, particularly if the RBA delays cuts and global risk sentiment holds steady.
However, a deterioration in labour data or falling commodity prices could quickly shift the narrative, pulling the Aussie back below 0.6550.
