- The AUD/USD exchange rate continued to consolidate after the Federal Reserve published minutes of the recent monetary policy meeting and as traders waited for the upcoming US jobs data. It was trading at 0.6485, where it has remained in the past few days.
Fed Minutes and US Jobs Report
The AUD/USD exchange rate has remained under pressure in the past few days as market participants reacted to the new developments in the United States and Australia.
RBA minutes released this week showed that officials were waiting for more data on the labor market to cut interest rates again. Analysts expect that the bank will cut rates in the first quarter of next year.
The AUD/USD exchange rate also reacted to the latest Federal Reserve minutes in which officials highlighted the current state of inflation, which has remained above the 2% target for many years.
These minutes cast a doubt on whether the Federal Reserve will cut interest rates in the next meeting, which explains why the US dollar rose in the American and Asian sessions.
The pair will next react to the upcoming US jobs data, which will come out later today. These September jobs numbers will provide more information on the state of the labor market.
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Economists polled by Reuters expect the data to show that the economy created 50k jobs in September, up from the 22k it added in the previous month. These numbers come at a time when more companies have been warning about layoffs, with the most notable ones being companies like Amazon and Target.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate has been in a tight range in the past few months. It recently dropped below the 50-day Exponential Moving Average (EMA).
The pair has formed a head-and-shoulders pattern and is now slightly above the neckline. It has also moved below the Ichimoku cloud indicator, while the Relative Strength Index (RSI) has moved below the neutral point at 50.
Therefore, the pair will likely remain in this range ahead of a strong bearish breakout. The next key level to watch will be at 0.6400. A move above the 50-day moving average will point to more upside.
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