AUD/USD muted as strong US PMIs and firm labor data boost US Dollar

• Strong US Initial Jobless Claims reinforce labor market resilience.
• Upbeat S&P Global PMIs signal solid economic momentum, lifting yields and the Greenback.
• AUD/USD seems muted as risk sentiment stays fragile despite the RBA’s relatively firm stance.

The AUD/USD pair trades neutrally near the 0.7160 price zone on Thursday, as the US Dollar (USD) gathered some strength following a fresh batch of solid United States (US) economic data. Weekly Initial Jobless Claims rose to 215K, slightly above the previous 212K but still consistent with a resilient labor market, reinforcing expectations that the Federal Reserve (Fed) can maintain a cautious, data-dependent stance.

At the same time, the latest S&P Global Purchasing Managers Indices (PMIs) surprised to the upside, with the Manufacturing PMI climbing to 54.1 from 52.5 and the Services PMI improving to 51.3 from 49.8, pointing to sustained expansion in the US economy. The data helped lift US yields, underpinning the Greenback and weighing on risk-sensitive currencies like the Australian Dollar (AUD).

Despite this pressure, downside in AUD/USD remained limited as the Reserve Bank of Australia (RBA) continues to signal a relatively hawkish bias amid sticky inflation, in contrast to the Fed, which is still debating the timing of future rate cuts. However, in the near term, stronger US data and cautious market sentiment are dominating price action, keeping the pair biased to the downside.

Short-term technical analysis:

On the four-hour chart, AUD/USD trades at 0.7159. The pair holds a modest bullish bias as it stabilizes around the 20-period Simple Moving Average (SMA) near 0.7159, trading well above the 100-period SMA at 0.7063, which underpins the broader uptrend. The Relative Strength Index (RSI) around 52 is neutral to slightly positive, suggesting consolidation with a mild topside inclination rather than aggressive momentum.

On the topside, initial resistance emerges at the nearby horizontal barrier of 0.7163, followed by 0.7167, where a break would open the way for a stronger advance. On the downside, the 20-period SMA at 0.7159 serves as immediate pivot support, ahead of clustered horizontal levels at 0.7137 and 0.7133; a break below these floors would expose the deeper 100-period SMA support near 0.7063.

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