19 September 2025,05:36
Daily Market Analysis
19 September 2025, 05:36
Key Takeaways:
*Employment unexpectedly fell by 5,000 in August despite the unemployment rate holding at 4.2%, weighing on sentiment.
*Weak labor data reinforced the case for additional rate cuts after the August 25 bps reduction.
*AUD/USD slid to 0.6600, with limited domestic catalysts seen before the September RBA meeting.
Market Summary:
The Australian dollar declined in the previous session, touching a weekly low near the 0.6600 level against the U.S. dollar, following a weaker-than-expected labor market report. While the unemployment rate held steady at 4.2%, in line with consensus, employment unexpectedly fell by 5,000 positions—a sharp contrast to expectations for a 20,000 increase—pointing to underlying softness in labor conditions.
The data reinforces the Reserve Bank of Australia’s decision to cut interest rates by 25 basis points in August and supports the case for further policy easing. In its recent communications, the RBA has emphasized a data-dependent approach, with a focus on supporting employment amid moderating inflation. The latest figures are likely to cement market expectations for additional rate cuts in the coming months.
With no major domestic economic releases scheduled before the RBA’s September policy meeting, the Australian dollar is expected to remain under pressure in the near term. The currency may also face headwinds from broader risk sentiment and U.S. dollar dynamics, particularly if expectations for Federal Reserve easing continue to evolve.
A sustained break below the 0.6600 level could open the door for a test of the next key support zone near 0.6550, while any rebound would likely require a positive shift in global risk appetite or unexpectedly hawkish RBA commentary.
The Australian dollar has extended its decline against the U.S. dollar, breaking decisively below its uptrend support line near the 0.6680 level and entering a pronounced corrective phase. The pair is now testing a critical liquidity zone around 0.6610, with a sustained move below this area likely opening the path toward the next significant support near the psychological 0.6600 handle.
The technical structure has shifted notably bearish, with the pair establishing a series of lower highs and lower lows following the breakdown. This price action reflects a combination of domestic headwinds—including softer labor market data and expectations for further Reserve Bank of Australia easing—and broad U.S. dollar strength amid evolving Federal Reserve policy expectations.
Momentum indicators are aligned with the deteriorating outlook. The Relative Strength Index has declined toward oversold territory, indicating strengthening selling pressure, while the Moving Average Convergence Divergence has crossed below its zero line, confirming that bearish momentum is accelerating.
A break below 0.6600 would signal a continuation of the downtrend, with the next key support level seen near 0.6550. Conversely, any near-term rebound would need to reclaim the 0.6650–0.6680 resistance zone to suggest a potential reversal of the current bearish bias.
Resistance Levels:0.6655, 0.6715
Support Levels: 0.6590, 06530
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