- The AUD/USD pair declines and faces challenges in advancing against the USD.
- US Nonfarm Payrolls fall short with 142K new jobs added, missing the 160K forecast.
- The RBA's hawkish stance implies no immediate rate cuts, potentially bolstering the AUD.
The AUD/USD fell by 0.85% on Friday, trading near the 0.6700 mark after the release of the US Nonfarm Payrolls (NFP) report for August. Despite this decline, the Reserve Bank of Australia's (RBA) hawkish stance indicates that imminent rate cuts are unlikely, which could help limit further losses for the Australian Dollar.
Economic prospects for Australia remain uncertain. The RBA's aggressive approach to tackling inflation has led to market expectations of only a 0.25% rate cut in 2024.
Daily Market Digest: Australian Dollar Weakens Against the US Dollar Following Mixed US Employment Data
- US NFP report shows weaker-than-expected job growth, with 142K fresh payrolls against expectations of 160K.
- Unemployment Rate fell to 4.2% as anticipated, from the prior 4.3%.
- Following the data, the likelihood of the Fed starting interest rate cuts this month remained steady, with a 45% chance of a 50 bps reduction to 4.75%-5.00%.
- On the other hand, RBA Governor Bullock's hawkish stance reinforces the belief that interest rates will remain unchanged in the short term.
- Withhile monetary policy divergences between the Fed and RBA becoming ever clearer, the downside for the Aussie is limited.
AUD/USD Technical Outlook: Bearish Momentum Tests Support at 0.6650
The AUD/USD pair has been trending downward since early September and is now approaching the critical support level of 0.6670. A breach below this level could result in additional declines in the near term.
The Relative Strength Index (RSI) is in the negative zone and trending sharply downward, signaling strong bearish control. The Moving Average Convergence Divergence (MACD) is also showing a bearish trend, confirming increasing selling pressure.
