AUD/USD threatens 0.6500 as the US labour market softens

AUD/USD rose near 0.6490 and consolidated above the 20-day SMA of 0.6473.
The ongoing softness of the US labour markets makes investors bet on a less aggressive Fed.
US yields dropped to a three-week low.

Patricio Martín FXStreet

In Wednesday’s session, the AUD/USD gained traction, as the USD is trading weak against most of its rivals following fresh soft employment figures. On the Aussie front, Australia reported weak housing data during the Asian session, while the Monthly Consumer Price Index (CPI) dropped to 4.9% YoY.

The ADP Employment Change figures from the US missed the consensus in August. The figure came in at 177,000, while the markets expected 195,000, significantly lower than the last reading of 371,000. In addition, the Q2 Gross Domestic Product (GDP) was revised
downwards to 2.1% YoY. The immediate reaction to the lower-than-expected ADPs and JOLTs from Tuesday was hopes that the tightening cycle from the Fed would end, which fueled a sharp decline in the 2,5 and 10-year yields to their lowest in three weeks. However, the CME FedWatch tool reflects that the odds of a hike in the November meeting slightly fell, but they remain high, around 44%. In addition, investors are pricing in that the Fed will cut rates sooner, in June 2024, which also weakens the USD.

That being said, before the September 20 meeting, the Fed will get an additional Nonfarm Payrolls (NFP) report this Friday, a Core Personal Consumption Expenditures (PCE) reading on Thursday and a Consumer Price Index (CPI) figures from August next Friday. Those inflation figures will likely weigh more on the Fed’s upcoming decisions.

AUD/USD Levels to watch

The daily chart analysis indicates a neutral to bullish outlook for the AUD/USD in the short term. The Relative Strength Index (RSI) is below its midline in negative territory but with a positive slope, aligning with the negative signal from the Moving Average Convergence Divergence (MACD), which displays rising green bars, suggesting that the bulls are slowly regaining momentum. Additionally, bullish signals on the four-hour chart indicate a forceful buying momentum, establishing a marked bull dominance over sellers in the shorter time frame.

Support levels: 0.6475 (20-day SMA), 0.6400, 0.6380.

Resistance levels: 0.6500, 0.6525, 0.6540.

AUD/USD Daily Chart

AUD/USD

Overview
Today last price	0.6488
Today Daily Change	0.0008
Today Daily Change %	0.12
Today daily open	0.648

Trends
Daily SMA20	0.6477
Daily SMA50	0.6622
Daily SMA100	0.6651
Daily SMA200	0.6726

Levels
Previous Daily High	0.6487
Previous Daily Low	0.6401
Previous Weekly High	0.6488
Previous Weekly Low	0.638
Previous Monthly High	0.6895
Previous Monthly Low	0.6599
Daily Fibonacci 38.2%	0.6454
Daily Fibonacci 61.8%	0.6434
Daily Pivot Point S1	0.6425
Daily Pivot Point S2	0.6371
Daily Pivot Point S3	0.634
Daily Pivot Point R1	0.6511
Daily Pivot Point R2	0.6542
Daily Pivot Point R3	0.6597

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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