AUD/USD hits two-week low after Australian jobs data

AUD/USD drops to lowest since May 31 on Australian jobs data.
Australia's jobless rate remained steady at 5.2% in May.
Aussie jobs growth bettered estimates, but the surge was largely fueled by part-time jobs.
Markets may pull forward expectations of an RBA rate cut to July.

Omkar Godbole FXStreet Contributor

AUD/USD slipped to 0.6914, the lowest level since May 31, after the official data released at 01:30 GMT showed Australia's jobless rate remained steady at 5.2% in May.

The markets were expecting the unemployment rate to drop to 5.1%. Further, the data showed the economy added 42.3K jobs in May, beating both the forecasted job growth of 17.5K and April's print of 28.4K by a big margin.

The big beat on the employment change, however, failed to put a bid under the AUD, possibly because the full-time jobs increased by a meager 2.4K, meaning the massive job addition in May was largely fueled by part-time jobs.

Overall, the jobs report is pointing to labor market weakness. As a result, the markets may pull forward expectations of an RBA rate cut to July, keeping the AUD under pressure in the short-term.

As of writing, the AUD/USD pair is trading at 0.6917, representing a 0.17% drop on the day. The currency pair closed at 0.6928 on Wednesday, violating the ascending trendline connecting May 23 and May 31 lows. So, the path of least resistance is to the downside.

Pivot levels

1. R3 0.6993
2. R2 0.6979
3. R1 0.6953
PP 0.6939
1. S1 0.6913
2. S2 0.6899
3. S3 0.6873

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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