The Australian Dollar edged higher against the US Dollar following the release of unexpectedly weak US employment data. The AUD/USD pair approached the 0.6930 level as investors responded to disappointing Nonfarm Payrolls figures, which pointed to a slowdown in US job creation and reduced expectations for further Federal Reserve interest rate hikes.
According to the US Department of Labor, only 57,000 jobs were added in June, far below the forecasted 110,000 positions. Additionally, May’s job growth was revised downward from 172,000 to 129,000, highlighting a broader cooling trend in the US labor market. Despite this slowdown, the unemployment rate fell slightly to 4.2% from 4.3%, largely due to a drop in labor force participation to 61.5%.
Wage growth remained steady with Average Hourly Earnings increasing by 0.3% month-over-month in June to $37.64, maintaining an annual gain of 3.5%. The average workweek held firm at 34.3 hours, suggesting that while hiring momentum has weakened, demand for workers remains relatively stable. Other labor market indicators showed mixed results: Initial Jobless Claims decreased to 215,000 for the week ending June 27, beating expectations, while Continuing Claims edged up slightly to 1.814 million.
This softer payroll report pushed US Treasury yields lower and weakened the US Dollar Index toward the 100.70 mark. Falling yields generally support higher-yielding currencies like the Australian Dollar, helping AUD/USD recover despite Australia facing its own economic challenges, including a recent trade deficit that limited further AUD gains.
From a technical standpoint, AUD/USD finds support near the 20-period Simple Moving Average around 0.6895 and nearby horizontal support zones. Resistance is seen near 0.6944 with a more substantial hurdle at the 100-period SMA close to 0.6972. The Relative Strength Index sits around 61, indicating moderate bullish momentum that could propel prices higher if resistance is breached.
On the downside, initial support levels lie at 0.6916 and 0.6903 before reaching critical moving average support near 0.6895 and extending down toward roughly 0.6883. A clear break above resistance might open the door for further advances in the short term; however, cautious optimism remains given mixed economic signals from both countries.
Overall, movements in AUD/USD reflect market sensitivity to US labor market data and central bank policy outlooks. Investors are balancing slower US job growth against Australia’s trade difficulties as they adjust currency positions amid ongoing global economic uncertainty.
