Australian Dollar trades under pressure amid strong US data

AUD/USD trades lower near the 0.6970 area on Thursday, giving back earlier gains as the US Dollar (USD) strengthens on the back of upbeat United States (US) labor market data and continued hostilities between the US and Iran.

US Initial Jobless Claims fell to 187K in the week ending July 18, well below the 212K market forecast and the previous revised 209K. The stronger-than-expected reading reinforced the view that the US labor market remains resilient, supporting US Treasury yields and the Greenback.

Risk sentiment also turned more cautious after US President Donald Trump said he was “considering a massive attack greater than anything before” and added that Israel would join “within two minutes” if asked. The remarks lifted geopolitical uncertainty and helped underpin safe-haven demand for the USD, limiting support for the Australian Dollar (AUD).

On the domestic front, Australia’s June employment report was broadly strong. Employment Change rose by 76.3K, far above the 15K expected and the previous 44K, while Full-Time Employment increased by 29.3K and Part-Time Employment climbed by 47K. The Participation Rate edged up to 67.0% from 66.7%, while the Unemployment Rate held steady at 4.4%, matching expectations.

Traders now look ahead to Australia’s preliminary July S&P Global PMIs, with the Composite PMI seen at 50.4, Manufacturing at 51.5 and Services at 50.5. Stronger PMI readings could help the AUD stabilize, while softer figures may leave AUD/USD vulnerable if the USD keeps advancing.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6974, holding below the 20-period Simple Moving Average (SMA) at 0.7000 while clinging just above nearby horizontal and trend supports, which maintains a mildly bearish near-term bias. The 100-period SMA at 0.6959 sits beneath price and offers underlying trend support, but the latest Relative Strength Index (RSI) reading near 40 hints at fading momentum and leaves the pair vulnerable while it remains capped by layered resistance overhead.

On the topside, initial resistance is aligned at 0.6979, followed by a more congested barrier at 0.6994 and the 20-period SMA at 0.7000, before a higher horizontal cap emerges at 0.7006. On the downside, immediate support is essentially at the current trading area near 0.6974, with a minor horizontal floor at 0.6964 and the 100-period SMA at 0.6959 expected to act as a deeper defensive zone if selling pressure extends.

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