The Impact of US Job Report on AUD/USD Trends

The Impact of US Job Report on AUD/USD Trends

After the recent US Job Report, there are expectations of a pickup in hiring which could potentially support wage growth and increase disposable income. This, in turn, may fuel consumer spending and demand-driven inflation. The net effect of this could lead to a higher-for-longer Fed rate path to raise borrowing costs and reduce disposable income.

Looking ahead, the markets will also be focusing on the upcoming US CPI Report and the Fed interest rate decision, economic projections, and press conference. The recent pickup in wage growth suggests that hotter-than-expected inflation numbers could impact investor expectations of multiple 2024 Fed rate cuts. Near-term trends in AUD/USD will be dependent on the US CPI Report and FOMC economic projections.

Currently, the AUD/USD pair is hovering above the 50-day and 200-day Exponential Moving Averages (EMAs), signaling bullish price momentum. A move through the $0.66500 handle could support a run at the $0.67003 resistance level, with a potential break above this level opening doors for a move towards the $0.67500 handle.

In addition to technical factors, Australian business confidence numbers and investor sentiment towards the Fed rate path will also play a crucial role in determining the future direction of AUD/USD trends. Any negative surprises in these data points could lead to a bearish outlook for the currency pair.

With a 14-period Daily Relative Strength Index (RSI) reading of 48.64, there is a possibility that the AUD could break below the $0.65500 handle before entering oversold territory. A fall through the $0.65760 support level could further signal a drop towards the $0.65500 handle, indicating a shift towards bearish momentum.

The recent US Job Report has set the stage for potential movements in the AUD/USD pair. While positive economic data and market expectations could drive the pair higher, any negative surprises could lead to a reversal in trends. It is important for traders to closely monitor upcoming economic events and technical indicators to navigate through the volatility in the currency markets.


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