The Aussie’s dip following a mixed employment report sparked a hint of bearish sentiment in Thursday’s AUD/USD forecast. Australian employment rebounded in October following a sluggish period the previous month. However, the jobless rate slightly increased as more individuals actively sought employment. At the same time, increased migration contributed to a larger labor supply.

Notably, net employment in Australia surged by 55,000 in October, surpassing market expectations of 20,000. Meanwhile, the jobless rate increased to 3.7%, in line with forecasts. This increase was primarily due to a rise in the participation rate, reaching an all-time peak of 67%.

Record numbers of migrants and students entering the country expanded the labor supply to meet demand. Therefore, despite the solid employment figure of 55,000, the labor force grew even more substantially by 83,000. Consequently, the increased supply suggests that the labor market is not the primary driver of inflation. As such, markets see little justification for the RBA implementing another rate hike in December.

The central bank recently raised rates to a 12-year high of 4.35% and kept the possibility of further increases open. However, futures indicate only a 7% probability of a rise in December. Moreover, the labor data hinted at a potential easing in the market, with the ABS highlighting a drop in the annual growth of hours worked from 5% earlier in the year to 1.7%.

AUD/USD key events today

Investors are eagerly awaiting major economic reports from the US, including

• Initial jobless claims
• The Philadelphia Fed Manufacturing Index

AUD/USD technical forecast: Resistance at 0.6525 prompts pullback.

AUD/USD 4-hour chart

Although the bias for AUD/USD is bullish, the price is currently pulling back after finding resistance at the 0.6525 level. The SMA, which sits below the price, and the RSI, which trades in bullish territory, support the bullish bias. 

The pullback is approaching the 0.6450 support level, where bulls might be waiting to resume the bullish move. Moreover, the 30-SMA might act as support for the price if it dips below 0.6450. A return of bullish momentum will likely see the price make a new high above the 0.6525 resistance level. However, the bullish bias will change if the price breaks below the 30-SMA.

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