AUDUSD on Friday dropped -0.2% to 0.62694. Week ending 2025-02-07 rose 2.04%. What happened.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.2%	-12.4 Pips
Week 2025-02-07	2.04%	125.2 Pips
February	0.88%	54.4 Pips

Upcoming key events for the new week (London Time)

Wed 01:30 PM CPI Inflation Rate (12-mth)
Wed 01:30 PM CPI Inflation Rate excluding Food and Energy sectors (12-mth)
Wed 03:00 PM Federal Reserve Chair Jerome Powell testifies
Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Fri 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In the United States, economic indicators showed mixed results. The unemployment rate slightly improved, resting at 4% in January compared to 4.1% in December, alongside an improvement in average hourly earnings growth from 0.3% to 0.5%, reflecting yearly wage growth from 3.9% to 4.1%, according to the Bureau of Labor Statistics. Despite these positive signs, nonfarm payroll employment experienced a significant decline, dropping from 256,000 in December to 143,000 in January. The U-6 unemployment rate remained unchanged at 7.5%. Initial unemployment claims saw an increase to 219,000 for the week ending February 1. Additionally, unit labor costs for the fourth quarter’s preliminary forecast showed a rise from 0.8% in Q3 to 3%. Meanwhile, nonfarm business labor productivity saw a decline from 2.2% to 1.2% in Q4. The U.S. also reported a drop in job openings from 8.156 million in November to 7.6 million in December, and a fall in new orders for manufactured goods, registering a -0.9% in December.

Turning to Australia, the trade balance for December demonstrated a notable decrease from 7,079 million in November to 5,085 million. This was driven by an increase in imports at 5.9%, up from a revised 1.4% in November, while exports diminished from 4.8% to 1.1% in December. Retail trade turnover also decreased in December, hitting -0.1% compared to 0.8% in the previous month, though the first quarter retail trade still showed improvement, climbing to 1% from 0.5% in the prior quarter. Building approvals rebounded with a growth of 0.7% in December, contrasting with a previous 3.6% decline in November.

The impact on the AUDUSD currency pair following these economic data releases is complex. The decrease in U.S. payroll employment and the decline in job openings suggest labor market challenges in the U.S., which might typically weaken the U.S. dollar. Conversely, the strong performance in U.S. hourly earnings and unit labor costs could counteract this by signaling possible inflationary pressures, thereby supporting the dollar as markets anticipate potential Federal Reserve actions. Meanwhile, weaker Australian trade data and fluctuations in retail performance could place downward pressure on the Australian dollar. As a result, the AUDUSD currency experienced a decline of 0.2% to 0.62694 on Friday but ended the week on a positive note due to earlier gains. Anticipations of significant U.S. economic events in the coming week, including CPI and PPI releases and Federal Reserve testimony, are poised to further influence the pair’s movements.

From X (Twitter)

"The overall rise in December was driven by 15.2% growth in private dwellings excluding houses. Approvals for private sector houses fell for the third straight month, down 3.0%," Daniel Rossi, ABS head of construction statistics

For more, see https://t.co/YO0zWUMBL2 pic.twitter.com/VQfPeu2rMD

— Australian Bureau of Statistics (@ABSStats) February 3, 2025

What can we expect from AUDUSD for the new week and what happened on Friday?

AUDUSD on Friday dropped -0.2% to 0.63. Price is above 9-Day EMA while Stochastic is rising in overbought zone. For the week ending 2025-02-07, the pair rose 2.04% or 125.2 pips higher.

Looking ahead, AUDUSD looks mixed as the pair is likely to consolidate above week low of 0.62.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 0.63 or at least consolidates above Weekly Pivot level of 0.62. On the downside, we are looking at week low 0.62 or 0.62 (WS1) as immediate support level. AUDUSD need to break on either side to indicate a short-term bias. A break above 0.63 would suggest bullish bias after recent positive movement.

For the month of February, AUDUSD is up by 0.88% or 54.4 pips higher.

Weekly key levels to watch out:

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