AUD/USD Breaks Out, But Australia's Jobs Report Holds the Key
AUD/USD has broken out of its near-term channel ceiling, driven by external tailwinds such as a weakening Dollar and rebounding risk appetite. However, Thursday's jobs report may be the catalyst that determines whether domestic fundamentals can join the move.
The jobs data is expected to show just 12k jobs growth, a significant slowdown from June's 76.3k, while the unemployment rate is anticipated to remain at 4.4%. This outcome would normally look like routine normalization after an outlier, but this time it sits in the middle of an unresolved disagreement over whether the RBA's tightening cycle is finished.
Economists believe the RBA has reached its peak, with all four major banks now forecasting no further hikes in 2026. However, RBA officials, including Governor Michele Bullock and Assistant Governor Christopher Kent, have consistently used hawkish language, suggesting the hike bias is deliberate rather than a sentence left behind by inertia.
The rates market remains divided, pricing roughly a 50% chance of another hike by year-end. June's 76.3k jobs surge already proved that one labor report can swing RBA pricing sharply, from 78% to 97% hike odds, showing Thursday's data carries real two-sided risk.
AUD/USD holds above the minor support level at 0.7042 with 0.7183 as the next objective; the broader uptrend from 2025 remains intact above the 0.6756 retracement level.