AUD/USD slides further to near 0.6680 as the U.S. Dollar outperforms ahead of NFP
• The AUD/USD pair has extended its losing streak for a third consecutive session, sliding to around 0.6676–0.6680 in late European trading as the U.S. Dollar Index (DXY) holds firm near 99.1 — a multi‑week high. This performance reflects robust dollar demand as traders position ahead of the crucial U.S. employment report later today.
• The U.S. Dollar’s strength against major currencies — including the Australian Dollar — is broad‑based, with the dollar showing resilience partly on expectations that solid labor data could reinforce the Federal Reserve’s current policy stance.
Why AUD/USD is under pressure
• U.S. data focus: With the Nonfarm Payrolls release imminent, market participants are reducing risk and favoring the U.S. Dollar as a defensive and yield‑linked asset. A strong jobs report would likely further support the dollar and weigh on risk currencies like AUD.
• Australian macro backdrop: Recent Australian economic signals — notably slower inflation — have dampened expectations for near‑term Reserve Bank of Australia (RBA) tightening, reducing support for the AUD. Softer inflation has trimmed bets on a potential RBA rate hike in February, increasing selling pressure on the Aussie.
Traders watching:
• U.S. Nonfarm Payrolls (NFP): Forecasts center on ~60,000 jobs added in December, a slight decline from November’s 64,000, with the unemployment rate seen dipping to around 4.5%. The full report — including wages and participation metrics — will be key to USD sentiment and AUD/USD direction.
• RBA stance: A softer Australian data profile has pared expectations of near‑term rate hikes, which weakens AUD relative to a potentially strong U.S. dollar.
Near‑term price outlook:
• Support: A break and hold below the 0.6670–0.6650 area could open the door to deeper retracement, with further downside toward 0.6600 and beyond if the dollar continues to dominate.
• Resistance: Immediate resistance sits near 0.6700–0.6720; reclaiming this zone would be needed to slow the downtrend and invite short‑covering.
Summary:
AUD/USD is weakening toward ~0.6680 as the U.S. Dollar outperforms ahead of the U.S. jobs report, with a firmer DXY and softer Australian inflation/reduced RBA hawkish expectations weighing on the Aussie. Markets are awaiting today’s NFP release for fresh directional cues.
