AUD/USD Price Forecast: Downside seems limited as upbeat jobs data lifts RBA rate hike bets

The AUD/USD pair regains positive traction following the release of a strong Australian jobs report on Thursday and reverses a major part of the previous day's losses. The Australian Bureau of Statistics (ABS) reported that the Unemployment Rate held steady at 4.1% in January, compared to consensus estimates for a rise to 4.2%. Additional details revealed that the economy added 17.8K new jobs during the reported month after a significant jump in December, while full-time jobs rose strongly by 50.5K. This points to a still tight labour market and comes on top of the recent high inflation readings, lifting bets for a second interest rate hike by the Reserve Bank of Australia (RBA) in 2026 and boosting the Australian Dollar (AUD).

In fact, the RBA lifted the Official Cash Rate (OCR) by 25 basis points (bps), to 3.85% earlier this month, and a further rise to the benchmark rate to 4.10% by August is nearly fully priced in. This marks a significant divergence in comparison to dovish US Federal Reserve (Fed) expectations and contributes to the AUD's relative outperformance against the US Dollar (USD). That said, Minutes of the January FOMC monetary policy meeting, released on Wednesday, showed that officials were divided over the policy outlook, with several indicating interest rates might need to stay higher for longer and some open to further rate hikes if inflation remains sticky. This, along with the upbeat US data, pushed the USD to over a one-week top.

In fact, the US Industrial Production increased 0.7% in January, following a 0.2% rise in the previous month. Adding to this, Manufacturing Output advanced 0.6%, marking its biggest monthly rise since February 2025. This underscored a still resilient US economy and backed the case for the Fed to hold interest rates steady. That said, markets are still pricing in the possibility of three 25 bps rate cuts by the Fed this year. Apart from this, threats to the US central bank's independence hold back the USD bulls from placing aggressive bets. Furthermore, a generally positive tone around the equity markets turns out to be another factor undermining the Greenback's safe-haven status and further lending support to the AUD/USD pair.

Traders now look forward to Thursday's US economic docket – featuring the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Pending Home Sales. Apart from this, speeches from influential FOMC members will drive the USD demand and provide some impetus to the AUD/USD pair. The focus, however, will remain glued to the US Personal Consumption Expenditure (PCE) Price Index, due for release on Friday. The crucial inflation data would be looked upon for more cues about the Fed's rate-cut path, which will play a key role in driving the USD demand. Nevertheless, the fundamental backdrop favors the Aussie bulls and suggests that the path of least resistance for the currency pair is to the upside.

AUD/USD 1-hour chart

Technical Analysis:

Spot prices have been oscillating in a familiar range over the past week or so, forming a rectangle pattern on short-term charts. Against the backdrop of a surge from the January swing low, this might still be categorized as a bullish consolidation phase and backs the case for additional gains. However, the AUD/USD pair's inability to build on the strength above the 100-hour Simple Moving Average (SMA) underscores the residual bearish pressure.

The 100 SMA's downward slope could cap the upside unless momentum broadens. That said, the Moving Average Convergence Divergence (MACD) turns positive around the zero mark, hinting at improving momentum. Moreover, the Relative Strength Index (RSI) sits at 56 (neutral) and rises, reinforcing an uptick in intraday bias. A sustained hold above the SMA could keep the path open for incremental gains.

MACD’s modest improvement above zero suggests buyers are gaining traction, and further expansion would strengthen the bullish case. RSI remains below overbought, and a push through the high-50s to low-60s would add conviction, while a dip toward 50 would point to consolidation. A failure to defend the average would tilt the bias back to sellers and invite a corrective pullback.

(The technical analysis of this story was written with the help of an AI tool.)