• The Australian economy added 47,500 jobs in August, beating estimates of 26,400.

• The RBA has remained cautious as other major central banks lower borrowing costs.

• The US central bank lowered borrowing costs by a significant 50-bps, putting pressure on the greenback.

The AUD/USD forecast shows a steep climb in the pair after better-than-expected Australian employment figures. At the same time, market participants were still reeling from the US central bank’s super-sized rate cut.

Data early on Thursday revealed that the Australian economy added 47,500 jobs in August, beating estimates of 26,400. The jump pointed to a resilient economy, reducing the chances of an RBA rate cut this year.

Furthermore, the unemployment rate held steady at 4.2%. The RBA has remained cautious as other major central banks lower borrowing costs. Policymakers have noted that stubborn inflation might push back the timing for the first rate cut to some time next year. Initially, market participants were hoping for a rate cut in December. However, after the jobs report rate cut, expectations fell, boosting the Australian dollar.

Notably, the RBA remains an outlier after the Fed implemented its first rate cut on Wednesday. Consequently, the Australian dollar has an edge over most of its peers. The US central bank lowered borrowing costs by a significant 50-bps, putting pressure on the greenback. For months, traders have been speculating on the timing and size of the first rate cut. Initially, data had supported a smaller cut. However, this changed late last week after several key sources suggested a more significant rate cut.

The Fed delivered the significant rate cut and forecasted more to come. More rate cuts in the US while the RBA remains cautious will likely keep the Aussie on the front foot.

AUD/USD key events today

• US unemployment rate

AUD/USD technical forecast: Bulls break above 0.6800

On the technical side, the AUD/USD price has broken above the 0.6800 resistance level. The steep move has pushed the price well above the 30-SMA, strengthening the bullish bias. At the same time, the RSI is entering the overbought region, indicating a surge in bullish momentum.

Bulls have set their sights on the 0.6850 key level. However, after such a steep climb, the price might pause and pull back to retest the 0.6800 level before continuing higher.

https://www.forexcrunch.com/blog/2024/09/19/aud-usd-forecast-aud-rallies-on-surprising-employment-gains/