AUD/USD mildly declines to 0.6370 amid steady US Dollar

The AUD/USD pair exhibits a subdued performance in Friday’s European session, mildly declining to 0.6370. The pair remains under pressure as the US Dollar (USD) gains strength on expectations that the Federal Reserve (Fed) will deliver a hawkish cut in next week’s decision. On Friday, there where no relevant highlights.

Fundamental overview

On the US front, the highlight of the week was that Initial Jobless Claims in the US hit a two-month high of 242K, fueling speculation about further Federal Reserve policy easing. Despite these factors, the pair failed to sustain gains, retreating below 0.6400.

In addition, the Bureau of Labor Statistics (BLS) revealed higher-than-expected inflation in the Producer Price Index (PPI) for November, with headline PPI increasing by 3% year-over-year (YoY), up from 2.4%, and Core PPI rising to 3.4% YoY. 

Meanwhile, Australian employment data for November exceeded expectations, with 35.6K jobs added compared to the forecasted 25K, and the unemployment rate dipping to 3.9%, beating the predicted 4.2%. This data led to a reassessment of monetary policy expectations with market odds for a February rate cut dropping from 70% to 50%, but the Reserve Bank of Australia (RBA) maintained a dovish stance, emphasizing its confidence in inflation moving sustainably toward target.

Technical overview

Technically, the AUD/USD pair mildly declined to 0.6370 on Friday, reflecting continued pressure from a stronger US Dollar. The Relative Strength Index (RSI) is at 34, indicating near oversold conditions and mildly declining. The MACD histogram shows decreasing green bars, signaling weakening bullish momentum. These indicators suggest the Aussie remains vulnerable but could trigger an upward corrective move if oversold conditions intensify.
Immediate support is observed near 0.6350, with a break below potentially opening the door to further downside. Resistance remains strong at 0.6400, aligning with the psychological level. A sustained move above 0.6400 would be needed to shift the short-term bearish bias and pave the way for a retest of 0.6430.