- AUD/USD struggles to capitalize on the upbeat Aussie jobs data-led intraday uptick.
- Bets that the RBA will cut rates next week cap the Aussie amid a weaker risk tone.
- A modest USD weakness supports the pair ahead of the US PPI and Fed’s Powell.
The AUD/USD pair attracts fresh sellers following an intraday uptick to levels just above mid-0.6400s and slips into negative territory for the second straight day during the first half of the European session on Thursday. The Australian Dollar (AUD) did get a minor lift following the release of upbeat domestic data, which showed that the economy added 89,000 jobs in April compared to 36,400 in the previous month and well above 20,000 expected. Adding to this, the Unemployment Rate held steady at 4.1% during the reported month, while Australia’s seasonally adjusted Wage Price Index rose by 3.4% year-over-year in Q1 2025, up from a 3.2% increase in Q1 2024 and consensus estimates.
This comes on top of the latest optimism led by the de-escalation of the potentially damaging US-China trade war and offers some support to the AUD/USD pair. In fact, the world’s two largest economies agreed to slash steep tariffs for at least 90 days. Adding to this, US President Donald Trump said on Tuesday that he could see himself dealing directly with Chinese President Xi Jinping on details of a trade pact. The AUD bulls, however, seem reluctant to place aggressive bets amid the growing acceptance that the Reserve Bank of Australia (RBA) will cut interest rates next week. Apart from this, a slight deterioration in the global risk sentiment contributes to capping the upside for the Aussie.
However, a modest US Dollar (USD) downtick acts as a tailwind and helps limit any meaningful downside for the AUD/USD pair. The US-China trade deal eased market concerns about a US recession and forced traders to pare their bets for a more aggressive policy easing by the Federal Reserve (Fed). The USD bulls, however, seem reluctant and opt to wait on the sidelines ahead of Thursday’s release of the US Producer Price Index (PPI) later during the North American session. Apart from this, Fed Chair Jerome Powell’s speech will be scrutinized for cues about the future rate-cut path, which will play a key role in influencing the USD price dynamics and provide a fresh impetus to the currency pair.
AUD/USD daily chart
Technical Outlook
The AUD/USD pair, so far, has been struggling to capitalize on its strength beyond a technically significant 200-day Simple Moving Average (SMA) and the 0.6500 psychological mark. However, the recent breakout through the 0.6300 confluence – comprising the 100-day SMA and the 38.2% Fibonacci retracement level of the October 2024-April 2025 downfall – and the 50% Fibo. level favor bullish traders amid still positive oscillators on the daily chart.
Hence, any subsequent slide below the 0.6400 round figure is more likely to find decent support and attract fresh buyers near the 0.6360-0.6355 horizontal zone. The latter should act as a pivotal point, below which the AUD/USD pair could slide back to the 0.6300 resistance breakpoint. Some follow-through selling would negate the positive outlook and expose the 0.6245 support before spot prices eventually drop to test sub-0.6200 levels.
On the flip side, the 0.6500 mark might continue to act as an immediate hurdle, above which the AUD/USD pair could climb to the next relevant hurdle near the 0.6545 region, or the 61.8% Fibo. level. A sustained strength beyond the latter should pave the way for additional gains towards reclaiming the 0.6600 round figure for the first time since November 2024 en route to the 0.6635-0.6640 resistance.
