AUD/USD Reverses Early Gains Ahead of Australian Jobs Data

AUD/USD Reverses Early Gains Ahead of Australian Jobs Data

The AUD/USD currency pair lost most of its early momentum on Wednesday, trading around 0.6540, despite a modest 0.10% intraday gain. The Aussie’s advance was capped as the US Dollar (USD) maintained strength near a three-week high, driven by unexpectedly strong US CPI inflation data.

US Dollar Holds Firm After Inflation Surprise

The US Dollar Index (DXY) remains elevated at 98.60, following a CPI report that showed inflation accelerating in import-heavy goods categories, indicating early signs of the tariff impact under President Trump's renewed policies.

Key CPI takeaway:

• Headline inflation accelerated to 2.7% YoY
• Core inflation climbed to 2.9% YoY

This has prompted traders to cut back expectations for a Federal Reserve rate cut in September.

According to the CME FedWatch Tool:

• Odds of a September rate cut dropped to 55.5% from 64.7% last week.

Focus Shifts to Australia’s June Jobs Data

Investors now shift their attention to Australia’s June labor market report, due Thursday, which could:

• Shape the Reserve Bank of Australia (RBA)’s near-term policy outlook
• Provide short-term direction for AUD/USD

A strong jobs print could reinforce RBA's neutral stance, offering potential support to the Aussie, while a weak reading may accelerate downside pressure.

Technical Outlook

• Support level: 0.6500
• Resistance level: 0.6575
• The pair needs a daily close above 0.6575 for bullish continuation.

Related Content on Tredu.com:

• AUD/USD Outlook: Can Aussie Hold Gains After Jobs Report?
• US Inflation Jumps in June: What It Means for Markets
• Fed Rate Cut Odds Shift as Traders React to CPI Data