The Australian dollar advanced on Friday, with AUD/USD touching a six-week high of 0.6588 after the latest US Nonfarm Payrolls (NFP) report underscored expectations of a Federal Reserve rate cut in September. At the time of writing, the pair trades at 0.6565, up 0.40% on the day.
US jobs miss drives Fed easing bets
The US economy added just 22,000 jobs in August, well below the 75,000 consensus and down from July’s upwardly revised 79,000. Average hourly earnings rose 0.3% month-on-month, matching forecasts, while the unemployment rate edged up to 4.3% from 4.2%.
Following the release, futures markets priced in 67 basis points of Fed easing by year-end. For September, traders now fully expect a 25-basis-point cut, while odds of a larger 50 bps move stand at 14% ahead of next week’s Consumer Price Index (CPI) data.
Aussie outlook tied to China and domestic sentiment
The Australian dollar remains heavily influenced by shifts in US dollar sentiment. Looking ahead, local drivers include Westpac Consumer Confidence data, while Chinese economic releases will also play a critical role in shaping near-term AUD moves.
Technical outlook: buyers eye 0.6600 barrier
Although AUD/USD briefly tested 0.6588, the pair has eased back toward 0.6560 as buyers struggle to clear the 0.6600 threshold. Momentum remains on the bullish side, with the Relative Strength Index (RSI) signaling upside potential.
A break above 0.6600 would expose resistance at the July 24 high of 0.6625, followed by 0.6650 and 0.6700. On the downside, a close below 0.6550 would shift focus to support at the 50-day SMA near 0.6520, the 20-day SMA at 0.6506, and the 100-day SMA at 0.6487.
