**Stronger Domestic Employment Data** Recent employment data in Australia may bolster the AUD. The ASX 30-Day Interbank Cash Rate Futures for December 2025 shows a 6% chance of a rate cut. Meanwhile, the US Dollar Index is slightly down, hovering around 99.50. Expectations for a Federal Reserve rate cut in December have fallen from 62% to 43% in just a week. US President Donald Trump’s signing of a funding bill has ended a 43-day government shutdown. Federal Reserve leaders mention moderate restrictions, noting mixed economic signals and an inflation rate of 3%. Job data from the US shows a loss of 11,250 jobs this week, with October seeing 153,074 job cuts, increasing the likelihood of policy easing. China’s retail sales grew by 2.9% year-over-year in October. In Australia, the unemployment rate decreased to 4.3%, with 42.2K new jobs added. The AUD/USD pair is trading around 0.6490, moving within a defined range. Technical analysis indicates crucial support at 0.6470 and resistance at 0.6514. Due to these mixed signals, caution is advised when dealing with the AUD/USD pair. The Reserve Bank of Australia is maintaining a balanced approach, but the strong domestic jobs report suggests economic strength, making the 6% chance of a December rate cut seem reasonable. A hold on rates is the most likely outcome. **Government Shutdown And Its Effects** The US Dollar’s outlook is complicated by the recent 43-day government shutdown, which has delayed important economic data. Just a week ago, market expectations for a Federal Reserve rate cut in December dropped dramatically from 62% to 43%. This change comes as Fed officials express concerns about persistent inflation, currently at 3%, well above their target. Recent labor data in the US has been weak. ADP reported job losses, and Challenger noted a significant increase in job cuts compared to October 2024. In similar situations, like the 2018 government shutdown, we saw increased volatility, indicating that sharp price swings might occur as delayed data is released. Implementing options to manage risk on directional trades could be wise in the coming weeks. We must also take into account the mixed economic signals from China, which pose challenges for the Australian Dollar. Weak figures in Industrial Production and Fixed Asset Investment are particularly troubling for the commodity-linked AUD. Throughout 2024, fears about China’s growth consistently hindered significant rallies in the AUD/USD. The AUD/USD is currently stable between approximately 0.6470 and 0.6630. This range, along with the underlying uncertainty, makes selling volatility appealing for derivative traders. Strategies like iron condors or short strangles could work well if we anticipate the pair will remain stable until December. Alternatively, we should stay alert for a possible price breakout as more US data emerges. Placing alerts near the key support at 0.6470 and resistance around 0.6630 is advisable. A decisive drop below support could lead us to August lows near 0.6414, while a rise above resistance would signal a possible upward trend. Create your live VT Markets account and start trading now.

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