The Australian dollar held near a 10-week high on Thursday, trading around 0.7150, after July’s labour report underperformed expectations despite the currency’s gains.
Australia’s employment fell by 15,800 last month, defying forecasts for a 15,000 increase and marking the first monthly decline since April. The unemployment rate rose to 4.5% from 4.4%, aligning with the Reserve Bank of Australia’s (RBA) year-end projection. While the headline figure suggested softness, the details were mixed: full-time employment increased by 16,300, but part-time roles declined and total hours worked fell 0.6%, indicating cooling labour demand. Participation also slipped to 66.9%.
The RBA maintained its cash rate at 4.35% on 11 August, its second consecutive hold after 75 basis points of increases since February. Deputy Governor Andrew Hauser later warned that further tightening may be needed if inflation risks materialise, citing geopolitical tensions, AI investment growth, and weak productivity. However, softer wage growth in the June quarter reduced the urgency for additional hikes.
The Aussie’s resilience appears driven by broader dollar weakness rather than domestic strength. The U.S. dollar index has held below 99.00, pressured by soft U.S. data, including a July payrolls decline of 23,000 and an unemployment rate of 4.1%. Over the past four weeks, AUD/USD has gained roughly 1.85%, and over the past year, the advance totals about 10.95%.
Technically, the pair has advanced steadily from a late-July low near 0.6922, reclaiming the 0.7100 handle and trading above both its nine-period and 50-day exponential moving averages. The 14-day Relative Strength Index sits around 63, a constructive but not overbought level. Resistance is seen at 0.7200, followed by 0.7250, while support lies at 0.7100, the 0.7085–0.7090 moving-average region, and deeper at 0.7030–0.7050 and 0.7000.
The analysis suggests the pair’s structural outlook remains constructive while it holds above 0.7100, supported by a sequence of higher lows and the RBA’s retained tightening bias. However, the advance has lacked a meaningful correction, and a daily close above 0.7200 would be required to confirm further extension. A slip back beneath 0.7100 could signal the rally has outpaced fundamentals.
Key catalysts ahead include Australia’s July consumer price index release on 26 August, the Jackson Hole symposium from 27–29 August, and the U.S. August Employment Situation report on 4 September. The RBA’s next policy meeting is scheduled for 15–16 September.
