AUD/USD Forecast: Surprising jobs growth sparks rally

• Australian jobs rose by 58,200 in July.

• The probability of an RBA rate cut in November fell from 55% to 45%.

• The US dollar was on the back foot after US consumer inflation numbers.

AUD/USD forecast points north as Aussie rises after surprise Australian jobs rise. However, the unemployment rate also rose, showing a mixed picture. Meanwhile, the US dollar remained fragile after data showed US consumer inflation rose moderately in July.

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On Thursday, Australia released its monthly employment report, showing stronger-than-expected job growth. Employment rose by 58,200 when economists had expected a gain of 20,000. The jump shows a resilient labor market, which is likely to keep the Bank of Australia cautious about rate cuts.

However, the report also showed that the unemployment rate rose to 4.2%, above expectations of 4.1%. However, expectations of a rate cut have fallen. Notably, the likelihood of an RBA rate cut in November fell from 55% to 45%.

Australia’s labor market has remained strong, keeping core inflation high. If this trend continues, the RBA will continue to delay rate cuts. The central bank has paused at 4.35% and could hold that rate until next year.

Meanwhile, the US dollar was on the back foot after US consumer inflation numbers. The CPI registered a moderate annual increase of 2.9%. Meanwhile, on a monthly basis, it rose 0.2%. As a result, it reinforced expectations for a Fed rate cut in September. However, markets now expect a smaller rate cut of 25 bps. In particular, the probability of a 25 bps cut increased to 64%, while that of a 50 bps cut decreased to 36%. The next high-impact report concerns retail sales.

Key AUD/USD events today

• Core US Retail Sales m/m
• US Retail Sales m/m
• US Jobless Claims

AUD/USD Technical Forecast: Bulls manage to stay above 30-SMA

Technically, the AUD/USD price is pushing the 30-SMA support, indicating a bullish trend. At the same time, the RSI remained above 50 in bullish territory. Initially, price pulled back to retest the SMA. If the bears had been strong enough, they would have reversed the trend.

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However, the bulls have resurfaced with a strong candlestick that could lead to higher prices. The next target for this uptrend is at the 0.6700 resistance level. This trend will continue as long as the price trades above the 30-SMA.

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