Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6945.
- Add a stop-loss at 0.7155.
- Timeline:1-2 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit 0.7155.
- Add a stop-loss at 0.6945.
The AUD/USD exchange rate remained under pressure this week as traders reflected on the latest Australian jobs data. It was trading at 0.7055, down from the year-to-date high of 0.7155.
Top Regulated Brokers
Australia Jobs Report
The AUD/USD pair remained under pressure this week after Australia released the latest labor market data. A report released on Wednesday showed that Australia's wage price index rose from 3.3% in the third quarter to 3.4% in the fourth quarter.
Another report released on Thursday showed that the Australian labor market did well in January this year. The economy added 17k jobs in January, with most of them being full-time. Part-time jobs dropped by 32k in January.
This report showed that the unemployment rate remained at a historical low of 4.1%, a sign that the labor market is operating to capacity.
These numbers came a few days after the Reserve Bank of Australia (RBA) published minutes of the last monetary policy meeting. The minutes showed that officials were concerned about the rising inflation in the country and hinted at more hikes this year.
The AUD/USD exchange rate also retreated after the Federal Reserve released minutes of the last monetary policy meeting. These minutes showed substantial division among policymakers.
Some officials continued supporting more interest rate cuts, noting that inflation has continued moving downwards in the past few weeks. At the same time, some officials supported leaving interest rates unchanged, noting that inflation remained above the 2% target for years.
The next key catalysts for the upcoming US macro data, which will come out on Thursday and Friday. The US will release the upcoming Philadelphia Fed manufacturing index and trade numbers. Most importantly, the US will publish the first estimate of the GDP report.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate has come under pressure in the past few days, moving from a high of 0.7155 on February 11 to the current 0.7055.
The Relative Strength Index (RSI) has dropped from a high of 85.65 to the current 60. Also, the two lines of the MACD indicators formed a bearish crossover pattern.
Therefore, the pair will likely continue falling, potentially to the key support level at 0.6945, its highest level in September last year. A move above the year-to-date high of 0.7155 will invalidate the bearish outlook.