AUD/USD Sets New 2022 Lows as the AU Labor Market Shows Signs of Cooling

  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD Analysis

The Reserve Bank of Australia had kept rates unchanged at 4.1% earlier this month [1], marking the second straight hold and the third in this tightening cycle, which started in May 2022 and has produced 400 basis points of hikes.

Inflation moderated further to 6% y/y in the second quarter, while today's data showed signs of cooling in the labor market. Unemployment rose to 3.7% in July and 14.6K jobs were lost, in the biggest decline of the year.

This can help policymakers stay in the sidelines again and sent AUD/USD to the lowest levels since November, exposing it to 0.6271. The pair is also weighed by hawkish Fed minutes and fears around the Chinese economy and its property sector.

On the other hand, the RBA has kept the door open to more hikes, as inflation remains far from the 2-3% target and the labor market is still tight, despite signs of easing. As per Governor Lowe's comments from last week, "it is possible that some further tightening" will be needed to achieve that goal. [2]

AUD/USD finds some reprieve during the European hours, as the RSI hit oversold levels, which may give it the opportunity to rebound towards 0.6500. Under these conditions however, we struggle to see sustained recovery above that level and the EMA200 (at around 0.6620) looks distant.

Why Trade with FXCM

Commission free with fast, efficient execution.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 17 Aug 2023 https://www.rba.gov.au/media-releases/2023/mr-23-19.html

2

Retrieved 03 Dec 2023 https://www.reuters.com/markets/australia-cbank-says-worst-over-inflation-policy-enters-calibration-stage-2023-08-11/

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.