- The AUD/USD forecast appears neutral after the dismal Chinese data.
- Australian employment data revealing weakness puts RBA in doubts about keeping tighter monetary policy.
- The markets await US NFP data due on Tuesday for further impetus.
The AUD/USD price opened the week slightly lower, trading near mid-0.6600 in Asian hours on Monday as weak Chinese economic data dampened sentiment. The move followed a disappointing set of November releases from China, Australia’s largest trading partner, reinforcing concerns about fragile demand conditions.
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China’s retail sales rose just 1.3% YoY, well below expectations for a near-3% increase, while industrial production slowed to 4.8% from October’s 4.9%. Fixed asset investment also missed forecasts, pointing to ongoing hesitation among consumers and businesses despite repeated policy support measures. Aussie came under mild pressure, as a reaction to dismal Chinese growth data.
Domestic factors have also weighed on the currency. The Australian dollar has eased over the past two sessions after labor market data showed a sharp deterioration in November. Employment fell by 21.3k jobs, compared to expected solid gains, raising questions about whether earlier economic resilience is starting to fade.
Although the Reserve Bank of Australia has recently warned that inflation risks remain elevated, the weak jobs report has reduced confidence in the near-term tighter policy.
Even so, AUD/USD losses remain contained by a broadly softer US dollar. The greenback continues to struggle as investors position for a more accommodative Fed path than policymakers currently signal. Although the Fed’s latest projections point to just one rate cut next year, market pricing suggests extended easing further into 2026, especially if labor market conditions continue to cool. That expectation has kept US yields under pressure and limited the dollar’s ability to rebound.
The next key test for the pair will come from US labor data, with the delayed Nonfarm Payrolls report due on Tuesday. Forecasts center on a modest rise in employment. Any downside surprise would reinforce expectations for further Fed easing, adding pressure on the dollar. In that scenario, AUD/USD could stabilize despite weak domestic fundamentals. On the other hand, a stronger-than-expected jobs report would give the dollar a lift and could drag the pair back toward recent lows.
Beyond the US data, traders will continue to watch developments in China after authorities signaled plans to issue ultra-long-term bonds in 2026 to support growth initiatives. This offers some longer-term reassurance, but markets remain focused on near-term activity data, where momentum is still lacking.
For now, AUD/USD sits at the intersection of soft China-linked fundamentals and a hesitant US dollar, leaving the pair sensitive to incoming data short-term swings rather than a clear trend.
AUD/USD Technical Forecast: Caught Between 20 and 50 MAs
The 4-hour chart shows the price trapped between the 20-period and 50-period MAs near the 0.6650 area. Meanwhile, the RSI stays around the 50.0 level, revealing no clear bias. Though the pair remains supported by 50-period MA and order block zone, the upside trend lacks momentum below 0.6700.
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The immediate support for the pair lies at 0.6630 minor demand area ahead of December swing lows near 0.6610 and then 100-period MA around 0.6570. On the upside, the immediate resistance appears at 0.6655 (20-MA) ahead of 0.6685 (swing high) and then 0.6700 (round number).
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