- US January’s Nonfarm Payrolls report crushed expectations to rise 467K vs. 150K.
- The Australian dollar edges lower during the North American session, down 1.02%.
- AUD/USD failure at the 50-DMA sent the pair tumbling under 0.7100 emphasizing its downward bias.
The AUD/USD snaps four days of gains losing on a better than expected US jobs report. At the time of writing, the AUD/USD is trading at 0.7066. A risk off-market mood keeps investors moving towards safe-haven assets, like the USD and the JPY.
In the meantime, the US Dollar Index, a gauge of the greenback’s value versus a basket of six peers, advances 0.24%, sitting at 95.59, underpinned by surging US T-bond yield, led by the 2-year up ten basis points, at 1.2998%.
US Nonfarm Payrolls surprise to the upside
In the meantime, the US Bureau of Labor Statistics (BLS) revealed the Nonfarm Payrolls reports for January, which added 467K employments, larger than the 150K estimated by analysts. During the week, White House economic advisers and Philadelphia’s Fed President Harker down talked about January’s employment report, which was expected worse than estimates, per the impact of the Covid-19 Omicron strain.
Digging deeper, the Unemployment Rate increased to 4.0%, a tenth higher but, the highlight was Average Hourly Earnings, which rose to 5.7% vs. 5.2% foreseen, which puts the Fed under pressure to hike rates more than the 25 bps priced in for the March meeting.
On the Australian dollar side, the Reserve Bank of Australia (RBA) Statement of Monetary Policy emphasized that the board is “prepared to be patient” and will monitor factors that could affect the Australian inflation outlook. The central bank reiterated that ending the QE program does not suggest a rate hike in the future.
AUD/USD Price Forecast: Technical outlook
The AUD/USD is downward biased, per location of the daily moving averages (DMAs), which reside above the spot price. Furthermore, the AUD/USD failure at the 50-DMA opened the door for further losses, sending the pair tumbling under 0.7100. The AUD/USD first support would be 0.7100. A breach of the latter would expose January 28 daily low at 0.6967, followed by a downslope support trendline around 0.6930-45.
