AUD/USD Struggles to Break Higher; Support Holds as Traders Await US Jobs Data

The Australian Dollar remains under selling pressure for a fourth consecutive session, trading near 0.6630 against its US counterpart. The pair has lost roughly 0.10% during Asian trading, with bulls failing to establish fresh momentum despite underlying support factors.

Weakness across multiple fronts continues to pressure the AUD. Australia’s employment figures from last Thursday painted a mixed picture, while China’s disappointing economic indicators released Monday have reignited concerns about the world’s second-largest economy. Combined with a softer tone in global equity markets, these factors have weighed on the perceived riskier Australian Dollar. For context, 500 AUD to USD converts to approximately $330 at current levels, illustrating the strength dynamics at play.

RBA hawkishness provides a counterbalance to downside moves. Reserve Bank of Australia Governor Michele Bullock signaled last week that additional rate cuts may not be warranted, while the Board explored potential rate-hiking scenarios. This stance—sharply divergent from expectations of Federal Reserve rate cuts—has limited deeper losses for the AUD/USD pair and offers a floor for further deterioration.

The US Dollar remains subdued despite historical seasonal strength. The USD Index, which measures the Greenback’s performance against a basket of major currencies, trades near its lowest point since early October. Market participants increasingly price in additional interest rate reductions from the Federal Reserve, while speculation about a dovish successor to Chair Jerome Powell keeps USD bulls sidelined. This dynamic has provided tailwinds for the AUD/USD exchange rate.

Caution prevails as critical US labor data approaches. Traders appear reluctant to establish aggressive positions ahead of the delayed October Nonfarm Payrolls report, a significant economic indicator that could reshape rate-cut expectations. Until strong evidence of renewed selling emerges, the three-week rally in AUD/USD should be treated with caution rather than confirmation of a sustained recovery.