- Employment in Australia rose by 58,200 in July.
- The probability of an RBA rate cut in November fell from 55% to 45%.
- The US dollar was on the back foot after US consumer inflation numbers.
The AUD/USD forecast points north as the Aussie dollar rises after a surprise jump in Australian jobs. However, the unemployment rate has also risen, showing a mixed picture. Meanwhile, the US dollar remained weak after data showed US consumer inflation rose modestly in July.
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Australia released its monthly jobs report on Thursday, showing a bigger-than-expected increase in jobs. Employment rose by 58,200 when economists had expected a gain of 20,000. The jump shows a resilient labor market that is likely to keep the Reserve Bank of Australia cautious about cutting rates.
However, the report also showed that the unemployment rate rose to 4.2%, above expectations of 4.1%. However, expectations for a rate cut have fallen. It is significant that the probability of a rate cut by the RBA in November fell from 55% to 45%.
Australia’s labor market has remained strong, keeping core inflation high. If this trend continues, the RBA will continue to delay rate cuts. The central bank paused at 4.35% and could keep this rate until next year.
Meanwhile, the US dollar was on the back foot after US consumer inflation data. The CPI showed a moderate annual increase of 2.9%. Meanwhile, on a monthly basis, it increased by 0.2%. As a result, it strengthened expectations for a Fed rate cut in September. However, markets now expect a smaller rate cut of 25 bps. Notably, the probability of a 25 bps cut increased to 64%, while the probability of a 50 bps cut fell to 36%. The next high-impact report is about retail sales.
AUD/USD key events today
- Core US retail sales m/m
- USA retail m/m
- US unemployment claims
AUD/USD Technical Forecast: Bulls manage to stay above 30-SMA
On the technical side, the AUD/USD price is pushing the 30-SMA support, indicating a bullish trend. At the same time, the RSI remained above 50 in bullish territory. Initially, the price pulled back to retest the SMA. If the bears were strong enough, they would reverse the trend.
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However, the bulls resurfaced with a strong candlestick that could lead to higher prices. The next target for this uptrend is at the 0.6700 resistance level. This trend will continue as long as the price trades above the 30-SMA.
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