AUD/USD at 0.6660 Amidst Neutral Technical Bias

AUD/USD at 0.6660 Amidst Neutral Technical Bias

Key Points:

  • AUD/USD at 0.6660, with a neutral bias; RSI slightly below 50.
  • May saw a job increase of 39.7K, and the unemployment rate dropped to 4.0%, supporting AUD.

On Thursday, the AUD/USD exchange rate stands at 0.6660. The technical analysis for the pair indicates a neutral bias, with the Relative Strength Index (RSI) over 14 days slightly below the 50 mark, suggesting neither strong bullish nor bearish momentum. This balance reflects the current market indecision and indicates a potential consolidation phase.

AUD/USD Support 0.6604, Resistance 0.6714

The AUD/USD pair finds support at two critical levels: the 50-day Exponential Moving Average (EMA) at 0.6604 and the lower boundary of the recent trading rectangle at 0.6585. These levels are crucial for traders to monitor as they represent potential buy zones. On the resistance side, the upper boundary of the rectangle at 0.6700 and the May high of 0.6714 serve as significant hurdles. A break above these resistance levels could signal a bullish trend continuation.

May Jobs Data: 39.7K Gain, Unemployment Down to 4.0%

Recent employment data from Australia has been stronger than expected. In May, employment change figures showed an increase of 39.7K jobs, surpassing the expected 30.0K and the previous month’s 38.5K. Additionally, the unemployment rate dropped to 4.0% in May from 4.1% in April, aligning with market expectations. This robust employment data supports the Australian dollar, potentially limiting further downside for the AUD/USD pair.

Fed’s Policies and US Dollar Recovery Affect AUD/USD

The US dollar has recently recovered some of its earlier losses, influencing the AUD/USD exchange rate. Factors such as the Federal Reserve’s hawkish hold on interest rates have undermined the Australian dollar against the US dollar. Traders are also looking ahead to upcoming US economic events, including initial jobless claims and the Producer Prices Index, which could further impact the pair.

US Rates Steady at 5.25%–5.50%, Fed Signals Caution

In the June Federal Open Market Committee (FOMC) meeting, the Federal Reserve decided to hold the benchmark lending rate at 5.25%–5.50% for the seventh consecutive time. Market participants widely anticipated this decision, reflecting the Fed’s cautious approach amidst ongoing economic uncertainties. The hawkish hold implies that the Fed is prepared to tighten monetary policy if inflationary pressures persist, which could strengthen the US dollar further.

Key Data and Levels to Watch for AUD/USD Traders

The AUD/USD exchange rate is poised to react to domestic and international economic indicators. Australian employment data and US economic releases will play pivotal roles in shaping the pair’s direction. Traders should closely monitor support and resistance levels and be prepared for potential volatility as new data emerges. The neutral technical bias and recent economic developments suggest a cautious trading approach for now, with opportunities for strategic positioning based on forthcoming data releases.