Aussie Drops After Mixed U.S. Jobs Report

Fundamental Analysis

* NFP Aftermath: The Australian Dollar turned negative and declined against the U.S. Dollar following the release of August’s U.S. Non-Farm Payrolls (NFP) report. The data revealed weaker-than-expected job growth, with 142K new jobs added, falling short of the forecasted 160K but still above July’s revised figure of 89K (originally 114K). Despite the headline miss, the unemployment rate matched expectations by dropping to 4.2%, while average hourly earnings increased by 3.8% year-over-year, surpassing forecasts. Chicago Fed President Austan Goolsbee mentioned that the Federal Reserve is gradually aligning with the market’s outlook on a potential rate cut but downplayed the possibility of a larger cut in September. The uneven job growth further highlights the slowing U.S. economy, though not enough to strongly fuel expectations of a double rate cut by the Fed later this month, which increased buying interest in the U.S dollar significantly.

Technical Analysis

* Technical Breakout: AUDUSD was traded lower following prior breakout below the previous support level 0.66900. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to likely extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 0.66200. Conversely, a potential reversal is also to be expected and the price could head back towards 0.67550 after it breach back above the level 0.66900.

Potential Risks

Moving ahead, traders will be closely monitoring additional economic data from the U.S., including the upcoming releases of the Consumer Price Index (CPI) and Producer Price Index (PPI) later this week, as these indicators will provide further insights into inflationary pressures and potentially offer key signals for future monetary policy decisions and market movements.

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Monitoring

Stay updated on US and Australia data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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