AUD/USD Fundamentals And Macro Drivers
We see the AUD/USD pair pushing near the 0.6650 level, showing strength even as the US dollar is not getting a boost from solid labor market figures. The latest JOLTS report showed job openings at a robust 8.4 million for April, which points to a resilient US labor market. This resilience, however, is not translating into dollar strength against the Aussie.
This move seems supported by a divergence in central bank expectations, as we anticipate the Reserve Bank of Australia will hold its hawkish tone amid sticky inflation. In contrast, the US Federal Reserve is showing signs it may consider rate cuts later in the year, weighing on the dollar. The recent US S&P Global PMI reading of 50.9 also suggests a slight cooling in the American economy.
In the immediate future, we are focused on Australia’s first-quarter GDP figures, which are due this week. A number above the forecasted 0.3% quarterly growth could provide another catalyst for the Aussie dollar to climb higher. Traders should also monitor Australia’s May PMI figures, which recently printed at a solid 52.1, indicating continued expansion.
Given this constructive backdrop, we believe traders could consider buying call options on AUD/USD to capitalize on potential further upside. This strategy allows for participation in gains while defining the maximum risk to the premium paid. An alternative could be selling cash-secured put options at levels we see as strong support, such as near the 0.6580 mark, to collect premium.
AUD/USD Technical Overview And Trading Levels
On a technical basis, AUD/USD maintains a bullish bias as it trades above its key moving averages around 0.6635 and 0.6620. The Relative Strength Index is near 62, suggesting there is still room for upward movement before the pair becomes overbought. We are watching for a sustained break above the 0.6660 resistance level to confirm the next leg up.
AUD/USD traded near 0.7190 on Tuesday, with the pair around 0.7186 as the US Dollar struggled to hold gains despite US labour data surprising to the upside. The Job Openings and Labor Turnover Survey (JOLTS) reported 7.618 million vacancies in April, up from a revised 6.887 million in March and above the 6.88 million consensus; it was the highest level since May 2024. Next on the calendar are Australia’s Q1 GDP figures and upcoming S&P Global PMI releases.
On the four-hour chart, the pair stayed above the 100-period SMA at 0.7171 and the 20-period SMA at 0.7168, with nearby floors clustered around 0.7177 and 0.7170. Momentum indicators were firmer, with RSI near 59. Resistance was marked at 0.7187, while support levels sat at 0.7177, then 0.7171 and 0.7170, with additional downside levels at 0.7168 and 0.7160.
