AUDUSD is under pressure despite Australia’s job growth

The AUDUSD rate is falling after rebounding from the channel’s upper boundary, with the current price at 0.6197. Find out more in our analysis for 17 January 2025.

AUDUSD forecast: key trading points

• Australia’s unemployment rate rose to 4.0% in December 2024
• Australia’s employment increased by 56.3 thousand, reaching a record 14.58 million people
• The markets estimate the likelihood of a 25-basis-point RBA interest rate cut at 70%
• AUDUSD forecast for 17 January 2025: 0.6155 and 0.6115

Fundamental analysis

The AUDUSD rate is declining for the second consecutive day. The buyers failed to break above the 0.6245 resistance level. Easing US inflation has fuelled expectations of a Federal Reserve interest rate cut this year, bolstering US dollar growth.

In the domestic market, investors are analysing the Reserve Bank of Australia’s monetary policy given the release of employment data and in anticipation of new inflation data. Australia’s seasonally adjusted unemployment rate rose to 4.0% in December 2024 from the November low of 3.9%, aligning with market forecasts.

Australia’s employment increased by 56.3 thousand reaching a new high of 14.58 million people. This growth was well above market expectations of 16.6 thousand and accelerated compared to the revised data for the previous month.

The markets currently estimate the likelihood of a 25-basis-point RBA interest rate cut next month at 70%. An additional rate cut in April has been fully priced in market forecasts.

AUDUSD technical analysis

The AUDUSD quotes are declining after rebounding from the EMA-65 line. The buyers continue to hold the currency pair within a descending channel. According to today’s AUDUSD forecast, the price is expected to undergo a significant bullish correction towards 0.6215 before potentially falling to the channel’s lower boundary at 0.6115.

A bearish divergence on the Stochastic Oscillator provides an additional signal for a decline. The downward scenario could be invalidated if the price secures above 0.6275, indicating a breakout above the channel’s upper boundary and paving the way for growth to 0.6325.

Summary

The AUDUSD rate declines due to the strengthening of the US dollar amid expectations of the Federal Reserve’s easing policy. Australia’s domestic data, including job growth and the unemployment rate, support forecasts for a RBA interest rate cut, limiting the potential for recovery of the Australian currency. The AUDUSD technical analysis suggests a potential short-term bullish correction towards 0.6215, followed by a decline to 0.6115. A breakout above the 0.6275 level will signal growth to 0.6325.