Australian Dollar Forecast: AUD/USD Faces Key Test Amid Aussie and US Jobs Data

Aussie Labor Market Crucial for the RBA

Australian labor market data will take the spotlight, influencing the AUD/USD pair and the RBA rate path.

Economists forecast employment to increase by 25k in August, down from 58.2k in July, with the unemployment rate expected to remain at 4.2%.

A lower-than-expected rise in employment or an unexpected increase in the unemployment rate could fuel speculation about a Q4 RBA rate cut. A weaker labor market might suppress wage growth, which in turn could dampen consumer spending and demand-driven inflation. A softer inflation outlook might allow the RBA to cut interest rates to stabilize prices.

Rising bets on a Q4 2024 RBA rate cut could push the AUD/USD below $0.67500. Conversely, better-than-expected labor market data might delay an RBA rate cut until 2025, possibly driving the AUD/USD toward $0.68500.

Expert Views on the Australian Labor Market

Callam Pickering, Asia Pacific Senior Economist at Indeed Australia, recently remarked on Australian labor market conditions, stating,

“2.2% of Australian jobs were vacant in the June quarter, down from 2.3% in the March quarter. That’s still well above what was considered normal before the pandemic. Overall, there were 350,900 job vacancies across the country. Down from 363,500 a quarter earlier.”

Pickering also presented a chart showing current vacancy rates relative to the 2010-2019 average, highlighting persistently elevated vacancy rates.

Considering the vacancy data, employment conditions are unlikely to deteriorate significantly. A stable labor market may affect RBA rate cut plans to tame inflation, which remains above the RBA’s 2-3% target range.

US Labor Market Under Scrutiny

Later in the Thursday session, US labor market data will also draw investor interest. Economists forecast initial jobless claims to hold steady at 230k in the week ending September 14. Higher-than-expected claims could fuel bets on a November 25-basis point Fed rate cut, which could push the AUD/USD toward $0.68500.

Conversely, an unexpected drop in claims could reduce expectations of a November Fed rate cut, which may pull the AUD/USD below $0.67500.

Short-Term Forecast for AUD/USD

Near-term AUD/USD trends will likely hinge on labor market data from both Australia and the US. A robust Australian labor market could temper bets on a Q4 RBA rate cut, driving Aussie dollar demand. An unexpected spike in US jobless claims could raise expectations of a November Fed rate cut, tilting monetary policy divergence further toward the Aussie dollar.

Investors should monitor the labor market data and central bank communications closely, which will influence AUD/USD trends. Monitor the real-time data, news updates, and expert commentary to adjust your trading strategies.

AUD/USD Technical Analysis

Daily Chart

The AUD/USD remains well above the 50-day and 200-day EMAs, confirming the bullish price trend.

A break above the $0.68006 resistance level could give the bulls a run at the $0.68500 level. Furthermore, a return to 0.68500 may signal a move toward $0.69.

Australian and US labor market data and central bank commentary require consideration.

Conversely, a fall through the $0.67500 level could bring the $0.67050 support level into play. A drop below the $0.67050 support level may give the bears a run at the 50-day EMA.

With a 14-period Daily RSI reading of 57.26, the Aussie dollar could return to the $0.68500 level before entering overbought territory.