- Australian retail sales rose 0.6% in October, above forecasts for a 0.4% increase.
- Market participants do not expect a rate cut by the RBA this year.
- US employers likely hired 195,000 new workers in November.
The AUD/USD forecast shows a volatile start to the week due to upbeat Australian economic data and a recovering dollar. At the same time, markets are preparing for a US non-farm payrolls report that will provide more clues about the Fed’s rate cut.
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Data on Monday showed Australian retail sales rose 0.6 per cent in October, above forecasts for a 0.4 per cent rise. Moreover, it was a significant jump from the previous reading of 0.1%. Accordingly, the Aussie rose briefly.
Australia’s economy has remained resilient with core inflation and a strong labor market keeping policymakers cautious. As a result, market participants do not expect a rate cut this year. At the same time, they are fully timing the first rate cut in May 2025. This will put the Reserve Bank of Australia among the last major central banks to cut borrowing costs.
Meanwhile, the dollar recovered after last week’s close. Nonetheless, the near-term outlook remains weak as markets increase bets on a December Fed rate cut. Currently, traders are pricing in a 65% chance of such an outcome.
However, this week’s data could change this outlook. The US will release its non-farm payrolls report, which will show the health of the labor market. According to estimates, employers likely hired 195,000 new workers in November. This would be a big increase from the previous month’s 12,000. However, the unemployment rate could rise from 4.1% to 4.2%, putting more pressure on the US central bank to cut rates in December.
AUD/USD key events today
AUD/USD Technical Forecast: In the range of 0.6450-0.6550
From the technical side, AUD/USD price is showing indecision near the 30-SMA after a recent break above it. At the same time, the RSI is trading near the 50 level, showing almost equal momentum for bulls and bears.
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Moreover, on a larger scale, the price is consolidating between the support level of 0.6450 and the resistance level at 0.6550. If the price stays above the SMA, it is likely to rise to retest the range resistance level. On the other hand, if it breaks below, there may be range support. Moreover, the price will start trending only when it breaks out of the consolidation.
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