AUD/USD Rebounds as Australian Employment Surges in September
The Australian Dollar (AUD) halted its three-day losing streak against the US Dollar (USD) after a stronger-than-expected Australian employment report for September 2024. Australia’s seasonally adjusted Employment Change surged by 64.1K, far exceeding the 25.0K forecast, pushing total employment to a record high of 14.52 million. This impressive growth follows a revised increase of 42.6K in August.
Australia’s Unemployment Rate remained steady at 4.1% in September, in line with August’s revised figure and below market expectations of 4.2%. The number of unemployed individuals fell by 9.2K to 615,700, further reinforcing positive labor market momentum.
US Dollar Supported by Strong Economic Data
While the AUD gained ground, the US Dollar (USD) found support from robust labor and inflation reports. These data releases have tempered expectations of aggressive rate cuts by the Federal Reserve (Fed). Traders are now eagerly awaiting the US Retail Sales data for September, with consumer spending anticipated to increase by 0.3%, up from 0.1% previously.
Market Sentiment and Future Rate Cuts
According to the CME FedWatch Tool, there is currently a 92.1% probability of a 25-basis-point rate cut in November. This reflects the market’s tempered expectations for more substantial easing measures. Meanwhile, Australia’s Reserve Bank of Australia (RBA) Deputy Governor Sarah Hunter reaffirmed the RBA’s commitment to fighting inflation, despite ongoing price pressures.
China’s Housing Minister Unveils Urbanization Plans
In a briefing on Thursday, China’s Housing Minister announced ambitious plans to launch one million village urbanization projects. The government is set to increase bank lending to 4 trillion Yuan, with a focus on expanding the list of approved projects. Decisions regarding property restrictions will be left to individual cities, depending on their local economic conditions and real estate markets.
Technical Analysis: AUD/USD Tests Key Resistance Level
The AUD/USD pair is currently trading around 0.6700, testing the upper boundary of a descending channel on the daily chart. A breakout above this channel could shift momentum from bearish to bullish, although bearish sentiment still prevails with the 14-day Relative Strength Index (RSI) below 50.
On the downside, the AUD/USD pair faces support at its eight-week low of 0.6622, last touched on September 11. A drop below this level could trigger further declines, targeting the channel’s lower boundary near the psychological level of 0.6580.
If the pair manages to break above the channel, resistance levels to watch include the nine-day Exponential Moving Average (EMA) at 0.6729, followed by the key psychological barrier at 0.6800.
Key Takeaways
- Australian employment surged by 64.1K in September, far surpassing market expectations.
- The Unemployment Rate remained at 4.1%, contributing to the Australian Dollar’s rebound.
- The US Dollar remains supported by strong labor and inflation data.
- Traders are awaiting US Retail Sales data, expected to rise by 0.3% in September.
- AUD/USD is testing key resistance levels, with potential bullish momentum ahead if a breakout occurs.
