FX.co ★ AUD/USD

RBA’s Assistant Governor Sarah Hunter recently indicated that these rates are contributing to what is expected to be a mild economic downturn. While the labor market remains tight, showing levels of employment growth, Hunter emphasized that this growth is likely to slow as it fails to keep pace with population growth. The balance between these economic factors will continue to shape the future direction of the pair in the coming weeks. Economic Slowdown and Labor Market Dynamics: The Reserve Bank of Australia’s (RBA) decision to maintain high interest rates is having a cooling effect on demand across the economy. With borrowing costs elevated, consumer and business spending has been subdued, leading to a modest slowdown in economic activity. Despite this, the Australian labor market remains relatively strong, though it is not yet at full employment levels. Employment growth continues, but it is expected to slow in line with the broader economic deceleration. As Hunter pointed out, employment is unlikely to grow faster than the Australian population, signaling a shift in labor market dynamics that could influence the AUD in the months ahead. Technical Analysis of the AUD/USD: If the pair manages to close above the 0.6340 level, this could signal a shift in sentiment and a potential breakout to the upside. A move above this level would clear the first key resistance zone and open the path for further bullish movement. Traders would then turn their attention to the next resistance level around 0.6400. A break and hold above this level would likely trigger a stronger bullish move, suggesting a more sustained recovery for the Australian Dollar.

An encouraging sign for AUD/USD bulls is the recent movement of the 14-day Relative Strength Index (RSI), which has crossed above the 50 mark. The RSI is a momentum indicator used by traders to assess whether a currency pair is overbought or oversold. When the RSI rises above 50, it typically signals a shift from bearish to bullish momentum.