The AUDUSD extended its losses on Friday following the release of US data Non-Farm Payrolls (NFP) report. This AUD/USD as risk sentiment deteriorated, with traders reacting to lower-than-expected job growth and weak wage growth as the pair struggled to recover. Meanwhile, China’s trade balance data showed an unexpected drop in imports, raising concerns about slowing demand, which further weighed on the Aussie.
DAILY SUMMARY MARKET DRIVER: Aussie Dollar Under Pressure After Non-Farm Payrolls Data Misses Estimates
The US non-farm payrolls report showed a slowdown in job creation in February, with 151,000 jobs added, down from an estimated 160,000. While still an improvement over January’s 125,000, the weak pace of hiring raised concerns about the resilience of the labor market.
Average hourly earnings growth slowed to 0.3% m/m, down from 0.4% in January, reinforcing expectations that wage pressures may be cooling. Meanwhile, the US unemployment rate edged up to 4.1%, suggesting that labor conditions may be weak.
China’s trade surplus widened to $170.52 billion in February, exceeding expectations. However, a sharp 8.4% fall in imports raised concerns about weakening domestic demand, which could have a negative impact on Australia’s export-driven economy.
The Reserve Bank of Australia (RBA) has taken a cautious stance on the outlook, expecting economic growth to slow to 2% by 2025. While this stance has supported the Aussie in the past, investors are wary of possible policy shifts in response to inflation and labor market conditions.
Risk sentiment deteriorated as investors reassessed global trade developments. Canada postponed a planned second round of retaliatory tariffs against the U.S. until April 2, after granting exemptions for Mexican and Canadian goods under the USMCA agreement. This development only temporarily eased broader concerns about global trade tensions.
AUD/USD Technical Analysis: Selling Pressure Increases as Key Support Levels Approach
The Australian dollar extended its downtrend on Friday, falling to the 0.6290 area during the US session as selling pressure intensified. The pair failed to maintain previous levels after a weaker-than-expected U.S. non-farm payrolls report added to market caution, prompting further downside.
The Moving Average Convergence Divergence (MACD) indicator continues to print declining red histogram bars, indicating that the bullish momentum is weakening. Meanwhile, the Relative Strength Index (RSI) has fallen to 53, down sharply but still above the neutral level. If the RSI continues to decline, further downside risks could be confirmed.
Confirmation of a break below the 0.6300 support area could open the door for further declines, with the next key level around 0.6270. On the bright side, resistance remains at 0.6365, which needs to be broken to shift sentiment back to the bulls.
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