AUDUSD extends gains following stronger-than-expected labor data

The AUDUSD rally extended into a fourth consecutive day, climbing from the broader support zone around 0.6665 and reaching its highest level since late September 2024 on Thursday at 0.6811.

The Australian dollar gained momentum as the U.S. dollar weakened amid a safe-haven rally in precious metals, driven by renewed tensions between the U.S. and the EU over Greenland. The currency received additional support from Australia’s stronger-than-expected December labor report.

Employment unexpectedly surged to more than double the forecasted figure, offsetting a downwardly revised November print, while the unemployment rate dropped sharply to 4.1% in December (versus 4.4% forecast and 4.3% in November). The upbeat data improved market sentiment and raised expectations that the Reserve Bank of Australia could consider a rate hike at its February policy meeting following the notable improvement in the labor market.

Attention now turns to next week’s inflation data, which is expected to provide the final confirmation for the RBA’s policy direction.

Technical indicators remain fully bullish on the daily chart, although overbought conditions suggest that upside momentum may lose steam. Still, the weekly chart also shows strong bullish signals, including a continuation pattern and a 10/200-week moving average golden cross, which should support the overall bullish outlook.

A daily close above the broken 76.4% Fibonacci level at 0.6699 is the minimum requirement to keep the bullish trend intact, while a sustained break above the 0.6800 level would likely accelerate the advance toward 0.6900 (round figure) and 0.6942 (September 30, 2024 peak).

Res: 0.6811; 0.6850; 0.6900; 0.6942
Sup: 0.6766; 0.6738; 0.6699; 0.6665