The Australian dollar continues to weaken due to disappointing employment data, reinforcing expectations of a rate cut from the Reserve Bank of Australia. The AUDUSD pair shows a bearish trend, influenced by some US dollar strength despite softer-than-expected US inflation data, with Core CPI and Core PPI missing expectations.<\/p>\n
On the daily chart, the AUDUSD price rejected the top trendline and moved downward. The key support zone is around the 0.6350 level, where buyers may emerge to push the price towards 0.69. Sellers, however, are looking for a break below to continue the decline to the 0.60 level.<\/p>\n
On the 1-hour chart, a minor resistance is noted around 0.6485. Sellers may enter on a retest with controlled risk above this level to target further declines, while buyers may aim for a rally if resistance is broken, pushing back towards the top trendline. The market dynamics are currently shaped by positioning moves rather than significant shifts in fundamental expectations.<\/p>\n
Given the downward momentum, we see the minor resistance near 0.6485 as an initial opportunity for bearish derivative plays. The recent Australian jobs report, which the source notes was much weaker than expected, strengthens this view. Markets are now pricing in a greater than 50% chance of a rate cut by the Reserve Bank of Australia by mid-2024, which should keep pressure on the currency.<\/p>\n
The strength in the US dollar is puzzling but should not be ignored, even with core inflation recently cooling to a 3.2% annual rate. We believe this is a positioning unwind from a very crowded trade rather than a reaction to fundamentals. Therefore, we should be cautious about betting on a significant AUDUSD rally based on softer American inflation prints alone.<\/p>\n
We see a clear historical parallel with the playbook used against the New Zealand dollar. For over a year, markets consistently priced in more aggressive rate cuts than the RBNZ delivered, weighing on the currency regardless of the central bank’s slower pace. We anticipate a similar dynamic could play out for the Australian dollar, suggesting a sustained period of weakness or consolidation.<\/p>\n
The critical level to watch is the support zone around 0.6350. As we approach this area, we will look to structure trades that benefit from a bounce, such as buying call options with a target toward the 0.6900 handle. The defined risk below this support makes such a strategy attractive from a risk-reward perspective.<\/p>\n
However, if that support fails to hold, it would be a strong bearish signal. A definitive break below 0.6350 would cause us to shift focus to strategies that profit from a further decline. In that scenario, we would consider buying puts targeting a move down towards the 0.6000 handle.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Australian dollar weakens on soft jobs data; AUDUSD bearish amid US dollar strength and technical resistance levels.<\/p>\n","protected":false},"author":62,"featured_media":16967,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-26622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=26622"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16967"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=26622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=26622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=26622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}