AUD/USD Forex Technical Analysis – Solid Jobs Data Supports RBA July Rate Hike Expectations

The Australian Dollar is edging lower on Thursday after giving back earlier gains from an upbeat jobs report. The Aussie was also supported by a relief rally in global risk assets after the Federal Reserve announced a widely expected 75-basis point rate hike Wednesday afternoon.

At 08:12 GMT, the AUD/USD is trading .6975, down 0.0028 or -0.40%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust (FXA) settled at $69.36, up $1.38 or +2.03%.

Upbeat Australian Jobs Data Lifts Rate Hike Expectations

The Aussie is being underpinned by data showing employment jumped 60,600 in May to blow away forecasts of a 25,000 gain. The unemployment rate held at a 50-year low of 3.9%, and would have fallen further if not for a sharp rise in participation to all-time highs.

The details of the report were also strong, reinforcing trader bets on the Reserve Bank of Australia (RBA) delivering another half-point rate hike in July to 1.35%.

Relief Rally after Fed Statement

The Aussie rallied on Wednesday to snap a five-session losing streak after a policy announcement by the Federal Reserve raised interest rates to market expectations as the central bank seeks to fight rising inflation without sparking a recession.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .6851 will change the main trend to down. A move through .7283 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through .7246 will change the minor trend to up.

The minor range is .6851 to .7035. Its pivot at .6943 is potential support.

On the upside, the first resistance is a pivot at .7067. This is followed by a retracement zone at .7144 to .7218.

Daily Swing Chart Technical Forecast

Trader reaction to .6943 is likely to determine the direction of the AUD/USD on Thursday.

Bullish Scenario

A sustained move over .6943 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the intraday high at .7035. Overtaking this level could lead to a quick test of .7067. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6943 will signal the presence of sellers. This could create the momentum needed to challenge the recent main bottom at .6851.

Taking out .6851 could extend the selling into a series of main bottoms at .6829, .6811 and .6777.