- Retail sales in Australia grew by 0.6% in October, above forecasts of a 0.4% increase.
- Market participants do not expect an RBA rate cut this year.
- US employers likely hired 195,000 new workers in November.
The AUD/USD forecast shows a volatile start to the week due to upbeat Australian economic data and a recovering dollar. At the same time, markets are gearing up for the US nonfarm employment report which will give more clues on Fed rate cuts.
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Data on Monday revealed that retail sales in Australia grew by 0.6% in October, above forecasts of a 0.4% increase. Moreover, it was a significant jump from the previous reading of 0.1%. Consequently, the Aussie rose briefly.
Australia’s economy has remained resilient with underlying inflation and the strong labor market keeping policymakers cautious. As a result, market participants do not expect a rate cut this year. At the same time, they are only fully pricing the first cut in May 2025. This will put the Reserve Bank of Australia among the last major central banks to lower borrowing costs.
Meanwhile, the dollar recovered after closing last week down. Nevertheless, the near-term outlook remains down as markets increase bets for a December Fed rate cut. Currently, traders are pricing a 65% chance of such an outcome.
However, data this week might shift this outlook. The US will release its nonfarm payrolls report, showing the health of the labor market. According to estimates, employers likely hired 195,000 new workers in November. This would be a big surge from the previous month’s 12,000. However, the unemployment rate might increase from 4.1% to 4.2%, putting more pressure on the US central bank to cut rates in December.
AUD/USD key events today
AUD/USD technical forecast: Ranging between 0.6450-0.6550
On the technical side, the AUD/USD price shows indecision near the 30-SMA after recently breaking above it. At the same time, the RSI trades near the 50 level, showing almost equal momentum for bulls and bears.
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Furthermore, on a larger scale, the price is consolidating between the 0.6450 support and the 0.6550 resistance levels. If the price stays above the SMA, it will likely climb to retest the range resistance level. On the other hand, if it breaks below, it might reach the range support. Moreover, The price will only start trending when it breaks out of consolidation.
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