- Employment in Australia experienced a strong rebound in February.
- Australia’s unemployment rate fell to 3.5%.
- Investors are not expecting a rate hike from the RBA at the next meeting.
Today’s AUD/USD forecast is slightly bullish. After two months of declines, employment in Australia experienced a strong rebound in February. The unemployment rate dropped to levels not seen in more than 50 years. This suggests that despite the central bank’s repeated interest rate increases, the labor market in the nation remained tight.
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According to data released Thursday by the Australian Bureau of Statistics, net employment increased by 64,600 in February over January, when it decreased by a revised 10,900. Market predictions called for a recovery of 48,500 jobs.
Analysts had expected the unemployment rate to fall to 3.6% from 3.7%, but instead, it fell to 3.5%. Hours worked went up by 3.9%, giving another sign of resilience.
The strong data, however, was overshadowed by world events during the previous night. Turbulence at Credit Suisse rekindled concerns that any tightening of monetary policy might exacerbate a worldwide recession. As a result, investors dismissed the possibility of another rate increase from the Reserve Bank of Australia.
While most investors anticipate a halt to rate increases in April, they have also factored in a 10% probability that the RBA may lower its 3.60% cash rate by 25 basis points. A month earlier, investors expected rates to peak at 4.10%, but now they expect them to decline to 3.35% by August.
AUD/USD key events today
Investors will pay attention to data coming from the US, including the building permits report and the initial jobless claims. The data will show the state of the US economy amid high interest rates.
AUD/USD technical forecast: Price pulls back from strong support zone
The 4-hour chart shows AUD/USD breaking above the 30-SMA. The price also respects a strong support zone comprising the 0.6606 and 0.6575 key levels. The bears have failed to break below this zone before and might try again.
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The RSI trades slightly above 50, showing strong bullish momentum. If the SMA holds firm as resistance, we might see bears return to try and take out the support zone. However, if bulls close far above the SMA, the price will likely retest the 0.6702 resistance.
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Saqib Iqbal
