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AUD/USD climbs sharply underpinned by RBA’s hawkish SoMP, despite solid US NFP data

  • US hiring soars in April: 253K jobs added, smashing the 180K forecast.
  • Market rethinks rate cut expectations as Nonfarm Payrolls beat estimates.
  • Aussie Dollar remains resilient amid a surprising RBA rate hike earlier this week.

The AUD/USD is climbing sharply after a stellar jobs report in the United States (US), which triggered an improvement in market sentiment, as troubled stocks from regional banks rose after the recent turmoil in the US banking system. The AUD/USD is trading at 0.6737, gaining 0.68% after hitting a low of 0.6607.

Solid US employment report leaves no room for rate cuts at Fed’s June meeting

The latest employment report in the US, the Nonfarm Payrolls, showed that hiring in April exceeded estimates as the economy added 253K above forecasts of 180K, in the aftermath of the US Federal Reserve (Fed) 25 bps rate hike on Wednesday. Following the Fed’s decision, market participants quickly began to price in rate cuts. Nevertheless, today’s market data has traders scrambling, as shown by the short-term interest rate futures dropping as they pare rate cut expectations.

The US jobs report revealed that Average Hourly Earnings rose 0.5% MoM, exceeding 0.3% forecasts, while the Unemployment Rate edged down to 3.4% from 3.5% in March. Once the data is in the rearview mirror, investors expect the Fed to hold rates unchanged for June’s decision.

Must read: Breaking: US Nonfarm Payrolls rise by 253,000 in April vs. 179,000 expected

In the meantime, the US Dollar Index (DXY), a gauge of the buck’s value vs. a basket of six currencies, trim some of its weekly losses and gains 0.02%, at 101.473. The US 10-year Treasury bond yield jumped eight bps, up at 3.439%, offering a cushion to AUD/USD sellers.

Nevertheless, the Aussie Dollar (AUD) is still resilient after a surprising rate hike early in the week. On Friday, the Statement of Monetary Policy (SoMP) revealed by the Reserve Bank of Australia (RBA) highlighted that risks for inflation were tilted on the upside, given low productivity and higher energy bills. RBA officials added that interest rates might have to rise further to curb inflation.

Upcoming events

the Fed parade will begin led by St. Louis Fed President James Bullard, Minnesota’s Neil Kashkari, and Fed Governor Lisa Cook.

AUD/USD Technical Analysis

AUD/USD Daily chart

The AUD/USD is still neutral biased but tilted upwards with the 200-EMA lying at around 0.6788, probing to be solid resistance. Although, the Relative Strength Index (RSI) indicator is aiming up, and buyers must reclaim the April 20 swing high at 0.6771 before challenging the trend-setter 200-day EMA. In that outcome, the AUD/USD should have no problems rallying towards 0.6800, which, once cleared, would open the door towards the February 21 daily high at 0.6919. On the other hand, downside risks lie below the 100-day EMA At 0.6735, followed by the 50-day EMA at 0.6707.

AUD/USD

Overview
Today last price0.6743
Today Daily Change0.0050
Today Daily Change %0.75
Today daily open0.6693
 
Trends
Daily SMA200.6677
Daily SMA500.6683
Daily SMA1000.6788
Daily SMA2000.673
 
Levels
Previous Daily High0.6706
Previous Daily Low0.664
Previous Weekly High0.6706
Previous Weekly Low0.6574
Previous Monthly High0.6806
Previous Monthly Low0.6574
Daily Fibonacci 38.2%0.6681
Daily Fibonacci 61.8%0.6666
Daily Pivot Point S10.6653
Daily Pivot Point S20.6614
Daily Pivot Point S30.6587
Daily Pivot Point R10.6719
Daily Pivot Point R20.6746
Daily Pivot Point R30.6785

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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