AUD/USD edges higher as strong jobs data lifts Australian dollar

Australia’s October labor market data provided strong support for the currency. Total employment rose by 42.2K, doubling market expectations of 20K, after a 12.8K increase the month before. Full-time employment accounted for most of the expansion, surging by 55.3K, while part-time roles declined by 13.1K. The participation rate held steady at 67.0%, and unemployment eased to 4.3% from a four-year high of 4.5%. The lowest unemployment levels were recorded in Tasmania (3.9%) and Western Australia (4.1%). Markets also noted the University of Melbourne’s consumer inflation expectations, which fell from 4.8% to 4.5% in November.

The combination of a strong labor market and slowing inflation could heavily influence the Reserve Bank of Australia’s upcoming monetary decisions. Earlier this month, the RBA kept its cash rate unchanged at 3.60%, following a 25-bp cut in August. Policymakers highlighted that CPI rose 1.0% QoQ and 3.0% YoY in Q3, while the updated forecast sees inflation easing toward 2.6% by 2027. Economists at major banks believe that falling unemployment strengthens the case for keeping rates at current levels. Commonwealth Bank argues the labor market remains “tight” and does not expect policy easing until 2026. Analysts at ANZ, however, see a chance of a cut toward 3.35% in early next year.

Meanwhile, U.S. investors await the first batch of macro data after the government reopened following a 43-day shutdown. Today’s focus is on retail sales. Forecasts suggest that monthly sales will ease from 0.6% to 0.4% in October, while the annual pace is expected to hold at 5.0%.

Support and Resistance Levels

Bollinger Bands on the daily chart are attempting to turn lower, with the price range narrowing — a sign of mixed, short-term market sentiment. MACD is rising but still shows only a weak buy signal with its histogram slightly above the signal line. Stochastic has pulled back from overbought territory and is moving lower, signaling the potential for a deeper corrective decline.

Resistance levels: 0.6556, 0.6579, 0.6600, 0.6628.

Support levels: 0.6530, 0.6514, 0.6500, 0.6480.

Trading Scenarios and AUD/USD Outlook

A break below 0.6514 would open the way for short positions targeting 0.6480, with a stop at 0.6530.

A return of bullish momentum and a breakout above 0.6556 could signal long entries toward 0.6600, with a stop at 0.6530.