Australian Dollar rises as weak US NFP weighs on the US Dollar

• AUD/USD climbed as the USD weakened after softer-than-expected US labor market data, with investors trimming expectations for further Fed tightening.
• US NFP disappointed sharply, adding only 57,000 jobs in June versus expectations near 110,000.
• Wages and jobless claims showed resilience, with Average Hourly Earnings rising 0.3% MoM and Initial Jobless Claims falling to 215,000, suggesting labor demand is cooling but not collapsing.

The AUD/USD pair climbed near the 0.6930 area on Thursday as the US Dollar (USD) came under pressure following softer-than-expected United States (US) labor market data. The pair advanced as investors trimmed expectations for further Federal Reserve (Fed) tightening, although weaker Australian trade figures limited the Aussie’s upside.

The US Nonfarm Payrolls (NFP) report showed that the US economy added only 57,000 jobs in June, well below expectations of around 110,000. May’s figure was also revised lower to 129,000 from the previously reported 172,000, reinforcing signs that hiring momentum is cooling. Despite the weaker-than-expected headline, the Unemployment Rate unexpectedly fell to 4.2% from 4.3%, although the decline was partly offset by a drop in labor force participation to 61.5%.

Wage data remained steady with Average Hourly Earnings rising 0.3% MoM in June to $37.64, while annual wage growth stood at 3.5%. The average workweek was unchanged at 34.3 hours, suggesting that labor demand is slowing but not collapsing.

Other labor data also pointed to a resilient jobs market. Initial Jobless Claims fell to 215,000 in the week ending June 27, below expectations, while Continuing Claims increased slightly to 1.814 million. The figures suggest layoffs remain contained, even as companies appear more cautious about hiring.

The softer payrolls report pushed US Treasury yields lower and weighed on the Greenback, with the US Dollar Index falling toward the 100.70 area. Lower US yields usually support higher-beta currencies such as the Australian Dollar, helping AUD/USD recover despite weakness in Australia’s own data.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6930. The pair is supported by the 20-period Simple Moving Average (SMA) around 0.6895 and a series of nearby horizontal floors, hinting at a mildly constructive tone, yet it remains capped below the 100-period SMA at 0.6972. The horizontal resistance at 0.6944 forms the first topside barrier ahead of the medium-term average, while the Relative Strength Index (RSI) near 61 shows firm but not extreme bullish momentum that could encourage further probing of overhead supply if 0.6944 gives way.

On the downside, initial support is seen at 0.6916, followed by 0.6903 and the 20-period SMA at 0.6895, with a deeper cushion at 0.6883. On the topside, a break above 0.6944 would expose the 100-period SMA at 0.6972 as the next key resistance, and only a sustained move above this level would open the door for a more pronounced bullish extension in the near term.

(The technical analysis of this story was written with the help of an AI tool.)