The Australian Dollar (AUD) trimmed its earlier gains against the US Dollar (USD) on Thursday, with the AUD/USD pair trading near 0.7140 as the US Dollar regained traction following the latest US labor market data [1]. US Initial Jobless Claims rose to 225,000 for the week ending May 30, surpassing market expectations of 213,000 and up from the previous reading of 212,000. Despite this increase, the data was interpreted as consistent with a relatively stable labor market, further supported by a decline in Continuing Claims [1].
Earlier in the day, Reserve Bank of Australia (RBA) Governor Michele Bullock delivered remarks with a relatively hawkish tone, emphasizing the central bank's commitment to ensuring inflation returns sustainably to target. Bullock also indicated that policymakers are still evaluating whether financial conditions are sufficiently restrictive and cautioned against premature policy easing. These comments supported Australian yields and helped the AUD limit its losses, despite the broader USD strength [1].
Technical analysis shows that AUD/USD is trading at 0.7141 with a modest bearish bias, remaining below both the 20-period Simple Moving Average (SMA) at 0.7158 and the 100-period SMA at 0.7161. The Relative Strength Index (RSI) around 44 suggests fading upside momentum, indicating that any bounces may be capped unless buyers can push the pair above the clustered moving averages. Key resistance levels are identified at 0.7149, 0.7158, and 0.7161, while immediate support lies at 0.7139, with further support at 0.7135 and 0.7128. A break below these levels could trigger a deeper corrective move in the near term [1].
Looking ahead, investors are focused on Friday’s US Nonfarm Payrolls report, which is expected to provide further insight into the strength of the US labor market and influence expectations for the Federal Reserve’s policy trajectory [1].
CONCLUSION
The Australian Dollar's pullback reflects a combination of hawkish signals from the RBA and renewed strength in the US Dollar following labor market data. Market participants are now awaiting the US Nonfarm Payrolls report for further direction, with technical indicators suggesting limited upside for AUD/USD unless key resistance levels are breached.