- AUD/USD weakens after disappointing Australian employment data.
- NZD/USD follows suit amid broader risk-off sentiment.
- USD/JPY consolidates within a high-volatility range as markets weigh Fed signals and political uncertainty.
AUD/USD: Hit by Jobs Miss, RBA Dovishness, and Chinese Headwinds
The Australian Dollar fell sharply on Thursday following a softer-than-expected employment report. The Australian economy added just 2,000 jobs in June—well below the 20,000 forecast—while full-time positions declined significantly. This was accompanied by a rise in the unemployment rate to 4.3%, further pressuring the RBA to consider easing monetary policy.
The Reserve Bank of Australia already appears divided, with three members favoring a rate cut. Market pricing reflects a near-90% probability of an August cut, weighing further on AUD sentiment.
Meanwhile, AUD/USD remains caught in a broader consolidation range, supported on the downside by 0.64 and capped near 0.67. The recent drop is also fueled by the strengthening US Dollar, which has rebounded off the 96.50 level and now challenges resistance at the 50-day SMA near 99.
China’s mixed economic signals have offered little help. While Q2 GDP and industrial output came in as expected, soft retail sales and high consumer debt continue to restrict growth. As Australia’s largest trading partner, a subdued Chinese outlook limits any meaningful AUD recovery.
USD/JPY: Treading Cautiously Amid Political and Inflation Uncertainty
The USD/JPY pair remains volatile as political developments add a fresh layer of risk. Reports that President Trump had explored removing Federal Reserve Chair Jerome Powell spooked markets, briefly driving USD/JPY lower despite earlier gains. Although Trump later dismissed the idea, the episode has kept traders on edge.
Technically, USD/JPY is struggling to build momentum above the 149.20 zone. The pair is currently consolidating near 148.00, with short-term direction likely to be dictated by the US Dollar Index, which faces key resistance at the 99 level. A pullback in the DXY could trigger a move back below support levels in USD/JPY.
NZD/USD: Testing Key Support Amid Broader Dollar Strength
The New Zealand Dollar is also under pressure, tracking the Aussie lower in response to weak employment data and persistent strength in the US Dollar. NZD/USD is testing major support around 0.5850. A clean break below this level could trigger further declines, though technical indicators suggest the pair is nearing oversold territory.
Despite downside risks, consolidation between 0.5850 and 0.6100 remains the dominant theme. A breakout beyond this range will likely determine the next directional bias.
Technical Outlook
AUD/USD – 4H Chart: Ascending Broadening Wedge
The pair is trading within an ascending broadening wedge, with resistance around 0.67 and support near 0.64. The recent weakness corresponds with a strong USD rebound. A break below 0.64 may open the door for further downside, while a push above 0.67 would signal renewed bullish momentum.
NZD/USD – 4H Chart: Range-Bound
NZD/USD continues to consolidate between 0.5850 and 0.6100. While support at 0.5850 remains intact for now, a break lower would likely extend losses. A rebound from this level could target the upper end of the current range.
USD/JPY – 4H Chart: In Neutral Territory
The pair is fluctuating within a defined range between 140 and 151. Having cleared 148.30, the path toward the upper boundary at 151 is in focus. A decisive breakout above 151 would confirm bullish continuation, while a drop below 140 would mark a shift in sentiment.
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