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  • Net employment in Australia increased by 53,000 in March.
  • Australia’s unemployment rate remained constant at 3.5%.
  • Risk sentiment increased due to lower-than-expected US inflation data.

Today’s AUD/USD forecast is bullish. Australia’s employment blew past forecasts for a second month in March, and the unemployment rate stayed close to 50-year lows. The strong report suggests the central bank’s tightening campaign might continue.

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The Australian Bureau of Statistics reported net employment increased by 53,000 in March compared to February. In February, it had rebounded by a significant but slightly downwardly revised 63,600. After several months of seasonal volatility, experts had been expecting a surge of 20,000.

The unemployment rate remained constant at 3.5%, contrary to analysts’ expectations for a modest increase to 3.6%.

Markets have adjusted to a higher chance of 18% for a 25 basis point hike when the Reserve Bank of Australia meets next in May. The local currency increased by 0.2% to $0.6707.

The RBA stopped its rate hikes in April to examine the tightening impact thus far, even though that could mean a delayed return to its inflation objective compared to other major nations. The RBA was keen to preserve the strong job gains.

According to Governor Philip Lowe, the halt does not mean that rate hikes have ended, and the monthly data flow will determine if the central bank needs to change interest rates again.

Aussie also got support from the weaker dollar. The dollar suffered on Thursday as risk sentiment increased due to lower-than-expected US inflation data. This raised expectations that the Federal Reserve will end its monetary tightening after raising interest rates one final time next month.

AUD/USD key events today

Investors will pay close attention to US data, including the initial jobless claims report and the producer price index. The PPI report will give yet another picture of inflation in the US.

AUD/USD technical forecast: Bulls aiming for a new higher high

AUD/USD technical forecast
AUD/USD technical forecast chart

In the 4-hour chart, AUD/USD is bullish above the 30-SMA, with the RSI supporting strong bullish momentum above 50. Bears had control until the price reached the 0.6620 support level. 

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At this point, bulls took over by breaking above the 30-SMA and the 0.6675 resistance level. Bulls are now making higher highs and lows and will likely take out the 0.6725 resistance level to retest the 0.6760 level.

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