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AUD/USD tries to reach 0.6500 as US labor market softens

  • The AUD/USD pair rose near 0.6490 and consolidated above the 20-day SMA of 0.6473.
  • Continued weakness in US labor markets has investors betting on a less aggressive Fed.
  • US yields fell to three-week lows.

In Wednesday’s session, the pair AUD/USD It gained ground as the dollar is trading weak against most of its rivals following the weak new jobs numbers. For its part, the monthly Consumer Price Index (CPI) fell to 4.9% year-on-year.

In the US, ADP employment numbers disappointed expectations in August. The figure was 177,000, while markets had expected 195,000, significantly lower than the last reading of 371,000. In addition, the Gross Domestic Product (GDP) for the second quarter was revised downward to 2.1% year-on-year. The immediate reaction to Tuesday’s weaker-than-expected ADP and JOLT data was hope that the Fed’s tightening cycle was coming to an end, driving yields sharply lower to 2.5 and 10 years to their lowest levels in three weeks. However, CME’s FedWatch tool shows that the odds of a hike at the November meeting fell slightly, but remain high at around 44%. Also, investors are pricing in the Fed cutting rates sooner, in June 2024, which also weakens the dollar.

That being said, ahead of the September 20 meeting, the Fed will receive an additional report on Non-Farm Payrolls (NFP) this Friday, a core Personal Consumption Expenditure (PCE) reading on Thursday, and US Price Index figures. Consumption (CPI) for August next Friday. These inflation figures will probably weigh more heavily in upcoming Fed decisions.

AUD/USD levels to watch

Daily chart analysis indicates a neutral to bullish trend for the AUD/USD in the short term. The Relative Strength Index (RSI) is below its midline in negative territory but sloping higher, aligning with the negative signal from the Moving Average Convergence Divergence (MACD), which shows rising green bars, suggesting that the bulls are slowly regaining momentum. Furthermore, the bullish signals on the four-hour chart indicate strong buying momentum, establishing strong bullish dominance over sellers on the shorter time frame.

Support levels: 0.6475 (20-day SMA), 0.6400, 0.6380.

Resistance levels: 0.6500, 0.6525, 0.6540.

AUD/USD Daily Chart

AUD/USD

Overview
Last price today 0.6488
Today Daily Variation 0.0008
today’s daily variation 0.12
today’s daily opening 0.648
Trends
daily SMA20 0.6477
daily SMA50 0.6622
daily SMA100 0.6651
daily SMA200 0.6726
levels
previous daily high 0.6487
previous daily low 0.6401
Previous Weekly High 0.6488
previous weekly low 0.638
Previous Monthly High 0.6895
Previous monthly minimum 0.6599
Fibonacci daily 38.2 0.6454
Fibonacci 61.8% daily 0.6434
Daily Pivot Point S1 0.6425
Daily Pivot Point S2 0.6371
Daily Pivot Point S3 0.634
Daily Pivot Point R1 0.6511
Daily Pivot Point R2 0.6542
Daily Pivot Point R3 0.6597

Source: Fx Street

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