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• Data revealed an unexpected decrease in Australia’s employment numbers for July.
• There’s speculation that the RBA might halt its interest rate hikes.
• There are divisions among Fed officials regarding the necessity of further rate hikes.

Today’s AUD/USD forecast is bearish. The Australian dollar dropped to its lowest point in nine months, also pulling the New Zealand dollar down.

This decline followed a data release revealing an unexpected decrease in Australia’s employment numbers for July. Moreover, there was a rise in the jobless rate. This increase in the jobless rate suggests a possible loosening of the previously tight labor market.

Furthermore, the surprising data sparked speculation that the Reserve Bank of Australia (RBA) might halt its interest rate hikes. Consequently, the local dollar fell to a nine-month low, reaching $0.6366.

Figures given by the Australian Bureau of Statistics (ABS) on Thursday indicated a net loss of 14,600 jobs in July compared to June. This reversal contradicted market expectations of a 15,000 increase in jobs. 

Notably, all these job losses occurred in the full-time job sector, which experienced a drop of 24,200 positions. Moreover, the jobless rate increased from 3.5% to 3.7%, exceeding analysts’ forecasts of 3.6% and marking the highest rate since April.

Nonetheless, at first glance, the report seemed to align with the RBA’s argument for a potential “turning point” in the market. This shift could help alleviate inflationary pressures. The central bank has already put its rate hikes on hold for the past two months, and investors speculate that the tightening cycle might be ending. Futures markets suggest only a 50-50 chance of one more quarter-point rate hike to reach 4.35% by year-end.

Elsewhere, minutes from the Fed’s July policy meeting revealed divisions among officials regarding the necessity of further rate hikes. 
 

AUD/USD Key Events Today

The US will release key reports, including the initial jobless claims and the Philadelphia Fed Manufacturing reports. 
 

AUD/USD Technical Forecast: Price Decline Reflects Renewed Bearish Enthusiasm.

(Click on image to enlarge)

AUD/USD 4-hour chart

On the charts, AUD/USD has made new lows after dropping and crossing below the 0.6400 support level. Moreover, this decline has greatly swung away from the 30-SMA, showing renewed enthusiasm among bears. 

This has also seen the RSI drop to near the oversold region. However, the price will likely pause near the 0.6400 key level before seeking lower support levels.

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