- Retail sales in the United States plummeted by the most in a year in December.
- US manufacturing output saw the sharpest decline in over two years.
- Net employment in Australia decreased by 14,600 in December.
Today’s AUD/USD forecast is bearish. On Thursday, the Australian dollar undid a recent rally as weak local jobs data and growing concerns about a US recession hurt the risk-sensitive currency.
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Retail sales in the United States plummeted by the most in a year in December, according to figures released overnight, while manufacturing output saw the sharpest decline in over two years, adding to concerns that the world’s largest economy is about to enter a recession.
This caused investors to turn back to safe-haven assets like the dollar and Treasuries, and futures markets are pricing in rate reduction from the Federal Reserve by year’s end.
The Australian dollar suffered on Thursday when local figures revealed an unexpected decline in employment in Australia in December. This news contributed to the risk-off atmosphere.
While the unemployment rate remained close to five-decade lows, employment in Australia surprisingly decreased in December after a large increase the previous month.
According to data released on Thursday, net employment decreased by 14,600 in December, missing estimates for a 22,500 increase.
Positively, the unemployment rate remained unchanged at 3.5%, slightly above the most recent 48-year low of 3.4%, while the participation rate fell to 66.6% from a historic high of 66.8% in November.
According to Lauren Ford, head of labor statistics at the ABS, the strong employment growth through 2022 and high participation and low unemployment continue to suggest a tight labor market.
AUD/USD key events today
Investors will receive key economic data from the US, including the initial jobless claims and a slew of housing market data.
AUD/USD technical forecast: Bears take control from bulls
The 4-hour chart shows AUD/USD trading below the 30-SMA and the RSI under 50. This comes after a bullish trend that saw prices mostly stay above the SMA. Bears took over with a strong bearish candle at the 0.7051 resistance level.
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The price also fell below the 0.6951 support level and is currently headed for the next support at 0.6875. This support might pause the decline and cause a pullback. Bears must start making lower lows and lower highs to confirm a new bearish trend.
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