Audusd shows consolidation amid labor market concerns and interest rate trends

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.48%	-31.3 Pips
Week to-date	-0.03%	-2 Pips
June	0.82%	53 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In Australia, economic data reveals some concerning trends in the labor market during May 2025. Notably, part-time employment saw a significant decline, shrinking by 41.2K positions from the previous gain of 29K. Additionally, the total labor force employment change decreased by 2.5K, a stark contrast from the robust 87.6K increase previously recorded. The participation rate also showed a slight drop, falling to 67% from 67.1%, suggesting a reduced engagement in the workforce. Despite these changes, the unemployment rate maintained a steady 4.1%. Meanwhile, full-time employment experienced a decrease, with the number of jobs reducing from the earlier 58.6K to 38.7K. This overall weak employment data could indicate a cooling labor market, which may lead to softer economic growth if the trend persists.

In the United States, interest rate projections indicate a minor adjustment with an upward trend. The Federal Reserve projected the 2nd-year rate to rise to 3.4% from the earlier 3.1%, while the 1st-year rate slightly increased to 3.6% from 3.4%, with the 3rd-year rate remaining unchanged at 3.9%. The Federal Funds Rate also stayed steady at 4.5%. In terms of employment, initial unemployment claims decreased, reaching 245K, an improvement from the previous 250K. Conversely, the housing sector showed signs of slowing, with building permits dropping to 1.393M from 1.422M and housing starts also declining to 1.256M from April’s revised figures.

The diverging employment and interest rate scenarios in Australia and the U.S. could affect the AUDUSD currency pair. Australia’s softer labor market data, coupled with more stable or rising interest projections in the U.S., might lead to further pressure on the Australian dollar. In the near term, the AUDUSD pair dropped by 0.48% to 0.64738, indicating consolidation in the market. The lack of major upcoming events may mean no immediate relief or change in trend, but should economic conditions in Australia not improve, the Australian dollar might face further depreciation against the U.S. dollar, increasing potential for more downside movement in the AUDUSD pair. Market participants will likely remain focused on U.S. interest rates and employment data for further cues.

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What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.48% to 0.64738. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.64423 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.65110 or trades above daily pivot 0.64767. Break above could target R1 at 0.65081. While to the downside, we are looking at 0.64423 (S1) and daily low of 0.64452 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.64452 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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