- Thursday’s data showed the core PCE price index rose 0.3%.
- Initial US jobless claims fell to 216,000, missing estimates of 229,000 claims.
- Economists do not expect a rate cut in Australia until next year.
The AUD/USD outlook shows bearish sentiment as the greenback edges higher ahead of the key US non-farm payrolls report. Meanwhile, a Reuters poll found economists expect the Reserve Bank of Australia to keep rates on hold on Tuesday.
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The dollar fluctuated due to uncertainty ahead of key US data and the presidential election. Thursday’s data showed the core PCE price index rose 0.3%, in line with expectations. As a result, there was little change in rate cut expectations. Meanwhile, initial jobless claims fell to 216,000, missing estimates of 229,000 claims. Employment data pointed to a tight labor market, in line with recent upbeat reports, which boosted the dollar.
The US economy remained resilient to high interest rates. As a result, markets have lowered expectations of an aggressive Fed rate-cutting cycle. At the same time, policymakers have taken a more cautious tone. Meanwhile, the central bank is more likely to implement just one rate cut this year. However, this perspective will depend on incoming data.
Today, the US will release the non-farm payrolls report, which shows job growth in October. Economists expect that employers will employ 106,000 workers during the month. Meanwhile, the unemployment rate could remain stable at 4.1%. The better-than-expected numbers will reduce Fed rate cut expectations, boosting the dollar. On the other hand, if employment is poor, rate cut bets will increase and put pressure on the dollar. Still, caution will remain as markets await the presidential election.
Meanwhile, economists don’t expect a rate cut in Australia until next year. Major domestic banks anticipate the first reduction in February. Further delays will keep the Aussie stable against its peers.
AUD/USD key events today
- Average hourly earnings in the US m/m
- Change in non-farm employment in the US
- ISM manufacturing PMI
AUD/USD technical outlook: Bears maintain control after retesting 30-SMA
From the technical side, AUD/USD price falls after finding resistance at 30-SMA. The price has been trading in a strong downtrend below the SMA and recently broke below the 0.6600 support level. Meanwhile, the RSI remained below 50, favoring bearish momentum.
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After making a new low, AUD/USD rose to retest the SMA. It is currently bouncing lower, with the bears eyeing the 0.6501 level. A lower low will strengthen the bear bias.
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