- The Australian economy added 64,100 jobs in September, well above forecasts of 25,000.
- The Australians pulled back as China’s stimulus disappointed.
- The US dollar remained solid as investors weighed in on a likely Trump victory in November.
AUD/USD outlook shows a brief uptick on upbeat Australian jobs report. However, prices retreated due to disappointment in China’s economic stimulus. Meanwhile, the dollar gained new life as market participants weighed in on the likelihood of a Trump victory.
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Data on Thursday revealed the Australian economy added 64,100 jobs in September, well above forecasts of 25,000. At the same time, the unemployment rate remained steady at 4.1% compared to estimates of 4.2%. Strong labor market numbers pushed back timing for first RBA rate cut, boost Aussie.
However, the rally was short-lived as traders absorbed China’s disappointing announcement. The country’s top officials have vowed to support the fragile housing market. However, they did not announce any new stimulus to strengthen the sector. As a result, the markets were disappointed and the Aussie fell along with the yuan.
Elsewhere, the US dollar remained solid as investors weighed in on a likely Trump victory in November. The upcoming election outcome could change fiscal policy, influencing monetary policy. Trump’s policies in particular are likely to increase inflation, prompting a pause in Fed rate cuts.
The dollar had a bullish trend due to optimistic US data. The economy has shown resilience, with inflation beating forecasts in September. As a result, policy makers have taken a cautious stance. Market participants brace for retail sales report for more Fed rate cut ideas.
AUD/USD key events today
- US Core Retail m/m
- USA retail m/m
- US unemployment claims
AUD/USD Technical Outlook: Price action signals a reversal
On the technical side, the AUD/USD price is trading below the 30-SMA, indicating a downtrend. At the same time, the RSI is supporting bearish momentum below the central line of 50. However, when the price broke below the 0.6700 support, the momentum faded. The RSI made a bullish divergence, signaling an impending reversal.
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Moreover, the price action showed a doji and a bullish candle. Patterns show indecision followed by an increase in bullish momentum. However, the bulls must break above the resistance at 0.6700 and the 30-SMA to confirm the reversal. Otherwise, the bears could break the 0.6650 level.
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