The AUD/USD forecast points south despite upbeat employment data from Australia. The Aussie jumped briefly before pulling back as market participants maintained bets for an RBA rate cut next week. At the same time, the dollar regained its shine amid easing global trade tensions.
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Data on Thursday revealed that employment in Australia rose by 89,000, beating estimates of a 20,900 increase. Meanwhile, the unemployment rate held steady at 4.1%. The upbeat report followed figures in the previous session showing solid wage growth in Q1. As a result, the Aussie gained.
However, the gains were brief as traders maintained bets of an RBA rate cut next week. Despite the strong labor market, policymakers are also watching the softer inflation and weaker global growth outlook. Still, traders have dialed back expected cuts from 100-bps to 75-bps this year.
Furthermore, AUD/USD collapsed as the dollar regained on Wednesday on lingering trade optimism. China and the US agreed on a temporary deal that allowed tariffs to drop sharply. It put a pause on their trade war and eased recession worries. At the same time, market participants expect more trade deals with countries like India and Japan.
On the technical side, the AUD/USD price has pulled back to the 30-SMA after failing to break above the 0.6500 key psychological level. Bears are currently challenging the SMA support. Meanwhile, the RSI has dropped below 50, indicating stronger bearish momentum.
However, the price has confirmed it is currently consolidating between the 0.6351 support and the 0.6500 key resistance. At the same time, the price is chopping through the 30-SMA with no clear direction. Neither bears nor bulls are willing to push the price far above the SMA and start a trend.
Therefore, even if the price breaks below the 30-SMA, it might pause again at the range support level. AUD/USD will only start trending when it breaks out of this consolidation area.