A deteriorating labor market could impact wage growth and reduce disposable income. A fall in disposable income could force consumers to curb spending and dampen demand-driven inflation. A softer inflation environment could allow the Fed to discuss interest rate cuts.
Beyond the numbers, FOMC member commentary also needs consideration. FOMC member Mary Daly is on the calendar to speak. Views on the economy, inflation, and the Fed rate path could move the dial.
Short-Term Forecast
Near-term AUD/USD trends will likely depend on trade data from China and FOMC member speeches. More hawkish Fed chatter could tilt monetary policy divergence toward the US dollar. However, the US CPI Report and Aussie labor market data could be pivotal for the AUD/USD. The reports are out next week.
AUD/USD Price Action
Daily Chart
The AUD/USD remained above the 50-day and 200-day EMAs, confirming the bullish price trends.
An Aussie dollar move to the $0.66 handle would support a return to the $0.66500 handle. A breakout from $0.66500 could give the bulls a run at the $0.67003 resistance level.
Trade data from China, US jobless claims, and FOMC member commentary need consideration.
Conversely, an AUD/USD fall through the $0.65760 support level and the 200-day EMA could signal a drop to the 50-day EMA. A break below the 50-day EMA would bring sub-$0.65 into play.
With a 14-period Daily RSI reading of 55.32, the AUD/USD could rise to the $0.67003 resistance level before entering overbought territory.
