AUD/USD Forecast: Australian Dollar Steady Ahead of Jobs Report

Australian Dollar Outlook: AUD/USD

AUD/USD holds within the weekly range following the kneejerk reaction to the US Consumer Price Index (CPI), and the exchange rate may attempt to retrace the decline from the monthly high (0.6522) as Australia’s Employment report is anticipated to show a rebound in job growth.

AUD/USD Forecast: Australian Dollar Steady Ahead of Jobs Report

AUD/USD registered a fresh yearly low (0.6358) during the previous after failing to defend the August low (0.6365), and the Australian Dollar may continue to underperform against its US counterpart as the Reserve Bank of Australia (RBA) keeps the cash rate at 4.10% for three-consecutive meetings.

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Nevertheless, the update to Australia’s Employment report may prop up AUD/USD as the economy is anticipated to add 23.0K jobs in August while the jobless rate is expected to hold steady at 3.7% during the same period.

A rebound in employment may put pressure on the RBA to further combat inflation as ‘the prices of many services are rising briskly,’ and the central bank may reestablish its hiking-cycle at the next meeting on October 3 as ‘returning inflation to target within a reasonable timeframe remains the Board’s priority.’

However, another unexpected decline in Australia Employment may drag on AUD/USD as it encourages Governor Philip Lowe and Co. to keep the cash rate on hold, and the exchange rate may struggle to retain the rebound from the monthly low (0.6358) as both the 50-Day (0.6565) and 200-Day (0.6708) SMA reflect a negative slope.

With that said, AUD/USD may threaten the range bound price action from earlier this week amid expectations for a rebound in Australia Employment, but the exchange rate may fall towards the November 2022 (0.6272) if it fails to defend the monthly low (0.6358).

Australian Dollar Price Chart – AUD/USD Daily

Chart Prepared by David Song, Strategist; AUD/USD on TradingView

AUD/USD cleared the August low (0.6365) during the previous week to register a fresh yearly low (0.6358), and the exchange rate may track the negative slope in both the 50-Day (0.6565) and 200-Day (0.6708) SMA should it struggle to retrace the decline from the start of the month.
In turn, AUD/USD may continue to give back the advance from the November 2022 (0.6272) if it fails to defend the monthly low (0.6358), with the next area of interest coming in around 0.6240 (61.8% Fibonacci extension).
However, the recent decline in AUD/USD failed to push the Relative Strength Index (RSI) below 30, and the exchange rate may attempt to breakout of the monthly range as the momentum indicator seems to be diverging with price.
Need a close above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) to bring the 50-Day SMA (0.6565) on the radar, with the next region of interest coming in around 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement).

Additional Market Outlooks

US Dollar Forecast: USD/JPY Rebounds with US CPI on Tap

British Pound Forecast: GBP/USD Head-and-Shoulders Pattern Unfolds

--- Written by David Song, Strategist

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