17 July 2025,05:33
Daily Market Analysis
17 July 2025, 05:33
Key Takeaways:
*Unemployment rose to a 2.5-year high, defying RBA expectations of continued strength.
*AUD/USD dropped over 0.5% as traders trimmed bets on further tightening.
Market Summary:
The Australian dollar suffered its steepest single-day decline in weeks after June’s labor market report revealed concerning cracks in the economy’s foundation. While employment eked out a meager 2,000-position gain—far below the 21,000 forecast—the more troubling development came as unemployment unexpectedly jumped to 4.3%, reaching its highest level in two-and-a-half years.
The disappointing data immediately undercut the Reserve Bank of Australia’s recent confidence in labor market resilience, sending AUD/USD plunging over 0.5% as traders priced in reduced odds of additional rate hikes. Market participants now face a growing disconnect between the RBA’s inflation-focused hawkish stance and emerging evidence of economic softening, particularly in the critical jobs sector.
The surprise deterioration comes at an inopportune moment for policymakers, who just last month emphasized labor market tightness when holding rates steady at 4.35%. With wage growth and consumer spending now facing potential headwinds from rising joblessness, the central bank may be forced to recalibrate its messaging at upcoming meetings.
Analysts warn the Aussie could face extended pressure unless forthcoming data reverses today’s negative momentum, with traders increasingly skeptical about the RBA’s capacity to maintain its restrictive policy stance should employment conditions continue weakening. The currency’s performance in coming sessions will likely hinge on whether markets view this as a temporary blip or the beginning of a more concerning labor market downturn.
The AUD/USD pair has been trading with heightened volatility in recent sessions, but until recently maintained a higher-low price structure—forming a clear uptrend support line. However, that support was breached following a more than 0.5% decline, raising the risk of a potential bearish trend reversal.
If the pair fails to reclaim and stabilize above the former support, the breakdown may mark a shift in market sentiment, reinforcing downside pressure. Technical indicators are flashing warning signals: the Relative Strength Index (RSI) is on the verge of entering oversold territory, while the MACD is hovering near the zero line, hinting at a possible bearish crossover.
Together, these signals point to growing downside momentum, with the potential for further losses should bearish conviction strengthen.
Resistance levels: 0.6530, 0.6590
Support levels: 0.6455, 0.6367
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