- Australia’s economy added 56,300 jobs in December.
- Unemployment in Australia edged higher in December.
- The US released a soft inflation report that weighed on the greenback.
The AUD/USD forecast shows steady RBA rate cut bets after a mixed employment report from Australia. Meanwhile, the greenback remained frail after inflation figures came in line with expectations. All eyes are now on the US retail sales report.
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Data on Thursday revealed that Australia’s economy added 56,300 jobs in December, beating forecasts of 14,500. Meanwhile, the unemployment rate met forecasts at 4.0%. However, it was an increase from the previous month’s 3.9%, showing some cracks in the labor market. The Australian dollar had a muted reaction to this report. Moreover, market participants are still pricing a 68% chance that the Reserve Bank of Australia will cut rates in February.
Meanwhile, the US released a soft inflation report that weighed on the greenback. Notably, the monthly CPI increased by 0.4%, meeting estimates. Similarly, the annual figure met forecasts, increasing by 2.9%. However, core inflation came in at 0.2%, missing forecasts of 0.3%.
The miss rekindled bets for Fed rate cuts. Moreover, since price pressures aligned with forecasts, the Fed might still implement at least one rate cut this year. This outlook paused the dollar’s recent rally. Markets are now eyeing the retail sales report, which will show the state of consumer spending.
AUD/USD key event today
- US core retail sales m/m
- US retail sales m/m
- US unemployment claims
AUD/USD technical forecast: Reversal from channel resistance
On the technical side, the AUD/USD price trades in a bearish channel with clear support and resistance trendlines. Within this channel, the price trades above the 30-SMA, showing bulls are in the lead. At the same time, the RSI trades above 50, suggesting solid bullish momentum.
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However, bulls made a swing that paused at the channel resistance. Moreover, bears seem ready to push the price lower. However, before that, the price must break below the 0.6200 support and the 30-SMA. In that case, the price would drop to retest the channel support.
On the other hand, if bulls are ready to take charge, they will try to break above the channel resistance. If this happens, it will signal a shift in sentiment to bullish. However, AUD/USD would have to break above the 0.6300 resistance level to confirm a new uptrend.
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