- The AUD/USD forecast indicates a surge in RBA rate cut bets.
- Australia’s economy added only 2,000 jobs, compared to the forecast of 21,000.
- Reports revealed that Trump was planning to fire Powell.
The AUD/USD forecast indicates a surge in RBA rate cut bets after a downbeat jobs report from Australia. Meanwhile, in the US, tensions between Trump and Powell continue to simmer. However, Fed rate cut bets have eased since the upbeat consumer inflation report on Tuesday.
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Data released on Thursday revealed that Australia’s economy added only 2,000 jobs, compared to the forecast of 21,000. At the same time, the unemployment rate came in at 4.3%, well above the forecast of 4.1%. The jobs report pointed to cracks in a labor market that has been quite resilient.
During the last meeting, RBA policymakers unexpectedly kept rates unchanged, saying inflation was still high. However, with labor market weakness, there is a higher chance of a rate cut at the next meeting. After the report, the likelihood of an August rate cut increased from 76% to 85%. As a result, the Australian dollar collapsed.
Elsewhere, the dollar eased as reports revealed that Trump was planning to fire Powell. However, the US president denied those reports. Such an outcome would put into question the independence of the Federal Reserve. Moreover, Fed rate cut bets have dropped since the upbeat CPI report. This could lead to increased friction between Trump and Powell.
AUD/USD key events today
- US core retail sales m/m
- US retail sales m/m
- US unemployment claims
AUD/USD technical forecast: Bears push below the range support
On the technical side, the AUD/USD price has broken out of its consolidation. The price has been trading between the 0.6500 support and the 0.6590 resistance levels. However, bears have gained enough momentum to push below the range support. Moreover, the price trades well below the 30-SMA, with the RSI near the oversold region, supporting a bearish bias.
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However, despite the break, the price has not yet closed below the level. To confirm the break, it must close below, pull back and retest the level before continuing lower. If this happens, AUD/USD will target the 0.6400 support level.
On the other hand, if the price fails to confirm a break, it will return to the consolidation area. In this case, bulls would gain momentum to retest the 0.6590 range resistance.
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