- US ADP topped estimates while jobless claims missed forecasts, prompting a strong US Non-Farm Payrolls report.
- The US Trade Balance deficit narrowed, boosting the dollar.
- AUD/USD Price Analysis: You could extend your losses after dipping below the 200 day EMA.
The Australian dollar (AUD) losing ground against the US dollar (USD) after a series of economic data releases in the United States (US) confirmed the strength of the labor market. Therefore, traders speculated that the Federal Reserve (Fed) would continue to tighten monetary conditions. At the time of writing, the AUD/USD pair is trading at 0.6767.
US labor market remains strong weighing on AUD/USD
Before the Wall Street open, the ADP Employment Change report showed that private hiring rose by 235,000 people in December, surpassing the 153,000 estimated by analysts and nearly doubling November’s figures. Report that service providers added 213,000, while manufacturing just 22,000. ADP Chief Economist Nela Richardson said: “The labor market is strong but fragmented, with hiring varying sharply across industries and the size of establishments.” She added that “business segments that hired aggressively in the first half of 2022 have slowed hiring and, in some cases, cut jobs in the last month of the year.”
Later, the US Department of Labor revealed that initial jobless claims last week rose less than estimated, at 204,000 versus 225,000 expected, while continuation claims were lower than expected. , at 1,694 million compared to the estimated 1,708 million. At the same time, the Trade Balance deficit narrowed compared to expectations, standing at $61.51 billion versus $73 billion expected.
Following the release of US economic data, the AUD/USD pair fell from 0.6840 towards a daily low of 0.6766, failing to hold gains above the 200-day EMA, which lies at 0.6820.
Meanwhile, Australian data released in the Asian session showed further deterioration in the Composite and Services PMI in their final readings for December, each at 47.3 and 47.5, worse than the November numbers.
Looking ahead to the week, traders’ attention is focused on Friday’s US Nonfarm Payrolls report. Following the release of the December Federal Reserve (Fed) minutes, officials emphasized that the labor market remains strong, emphasizing the need for a higher unemployment rate. Therefore, strong US NFP data could increase the likelihood of a 50 basis point rate hike by the US central bank.
AUD/USD Price Analysis: Technical Perspective
After failing to break above Thursday’s high at 0.6886 and dipping below the 200 day EMA, the AUD/USD pair could extend its losses during the day. Its first hurdle in the downtrend would be the 20 day EMA at 0.6747, followed by the 100 day EMA at 0.6706 and the 50 day EMA at 0.6696. Once all these levels are broken, the way could be paved towards the 21st November low at 0.6584.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.