- AUD/USD will end the week with gains, up 1.50%.
- The US non-farm payrolls report beat expectations, giving the green light for a Fed hike.
- Fed’s Evans: Raising at every meeting is essential.
- AUD/USD Technical Outlook: Bullish bias as long as it stays above the 200-day DMA.
The AUD/USD rises for the third day in a row, with an eye on closing higher on the week, though faced stiff resistance around 0.7369, as the US Department of Labor reported that the US economy added more jobs than expected, amid a risk aversion mood due to rising tensions between the Ukraine and Russia conflict. At press time, the AUD/USD is trading at 0.7348.
The US labor market improves and consolidates a 25 bp rate hike by the Fed
The US Bureau of Labor Statistics (BLS) released the Non-Farm Payrolls report for February. The figures exceeded expectations and increased by 678,000, above the 400,000 estimated by market analysts. In addition, the unemployment rate fell and average hourly earnings were little changed from the previous month.
The February report would be the last before the Fed’s March 15-16 meeting. The improvement in the labor market gives the green light to the Fed’s first rate hike since December 2018. In fact, the odds of a 25 bps hike, according to money market futures, are 95%, although the figures The US inflation data on March 10 would give additional clues about the size of the rate hike.
Following the US NFP report, Chicago Fed President Charles Evans crossed the wires in an interview with CNBC. Evans said employment figures have been “pretty good” for some time and mentioned a “huge amount” of uncertainty regarding the conflict between Russia and Ukraine. In addition, he added that it would be “more than essential” to raise rates by 25 bps at each meeting.
Russia-Ukraine update
During the Asian session, a fire was reported at Ukraine’s Zaporizhzhia nuclear power plant, which is the largest amid an attack by Russian troops. Initially, Ukraine’s Foreign Minister Kuleba confirmed the news and warned that an explosion would be ten times bigger than Chernobyl. Later, Ukraine’s state emergency service reported that the fire broke out outside the perimeter, emphasizing that the safety of the nuclear power plant was now assured.
Since then, the Zaporizhzhia nuclear power plant has been seized by Russian military forces, according to the regional authority.
AUD/USD Price Forecast: Technical Outlook
AUD/USD has a bullish bias, although it did witness a pullback at the 200 DMA, which was used to open further bullish bets, with AUD/USD jumping to the 0.7340 area. AUD/USD’s first resistance would be the Nov 16 high at 0.7368. A break of the latter would expose the 0.7400 level, followed by the 3rd September high at 0.7478 and then 0.7500.
Additional technical levels
Source: Fx Street
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