AUD/USD eased to around 0.6970 on Thursday as the US Dollar strengthened after US Initial Jobless Claims fell to 187K in the week ending 18 July, compared with a 212K forecast and a previously revised 209K. This supported US Treasury yields and the Greenback, while risk appetite cooled amid continued US–Iran tensions. The pair was also weighed as safe-haven demand for the USD firmed following remarks from President Donald Trump about considering a “massive attack greater than anything before”, with Israel joining “within two minutes” if asked.
In Australia, June labour data were firm: Employment Change rose 76.3K versus 15K expected and a prior 44K, with Full-Time Employment up 29.3K and Part-Time Employment up 47K. The Participation Rate increased to 67.0% from 66.7%, while the Unemployment Rate held at 4.4% in line with expectations. Attention turns to preliminary July S&P Global PMIs, seen at 50.4 for Composite, 51.5 for Manufacturing and 50.5 for Services. On the 4-hour chart, price was 0.6974, below the 20-period SMA at 0.7000, above the 100-period SMA at 0.6959, and with RSI near 40; resistance sits at 0.6979, 0.6994, 0.7000 and 0.7006, with support at 0.6974, 0.6964 and 0.6959.
US Labor Market Strength and Geopolitical Drivers
We see the Australian Dollar facing downward pressure near 0.6970, largely driven by a surprisingly resilient US labor market. Last week’s US jobless claims dropped to 187,000, significantly beating expectations and boosting US Treasury yields. Because of this strong Greenback momentum, we believe derivative traders should look to position for further near-term weakness in the AUD/USD pair.
Geopolitical tensions in the Middle East are also driving safe-haven flows directly into the US Dollar. Historical data shows that during periods of heightened global conflict, risk-sensitive currencies like the Aussie dollar tend to underperform against safe havens. We recommend buying short-term AUD/USD put options to profit from potential sudden drops if these international tensions escalate.
Technical Barriers and Trading Strategies
While Australia’s June employment grew by a massive 76,300 jobs, this domestic strength is failing to lift the Aussie dollar past key technical barriers. Right now, the currency is trading below its 20-period Simple Moving Average of 0.7000, with the Relative Strength Index hovering near a weak 40. We suggest implementing bear call spreads, selling calls at the 0.7000 resistance level while buying protection slightly higher to take advantage of this ceiling.
For futures traders, we favor establishing short positions near the 0.6980 mark with tight stop-losses just above 0.7000. If the price breaks below the immediate 100-period support at 0.6959, we could see a rapid slide toward the mid-0.6900s. We must monitor today’s upcoming July S&P Global PMI data closely, as any disappointing figures will likely accelerate this downward trend.
