AUD/USD Nears 0.6950 as Weak US Jobs Data Supports a Rebound While Broader Downtrend Remains in Focus

VG Markets · 2026-07-03T09:26:44Z
AUD/USD Nears 0.6950 as Weak US Jobs Data Supports a Rebound While Broader Downtrend Remains in Focus

The Australian dollar strengthened for a second consecutive session on Friday, approaching 0.6950 after rebounding from Thursday's low of 0.6865. According to Trading Economics, the pair is on track for a weekly gain of around 0.6%, partially recovering after declining by more than 2% over the previous two weeks.

US Dollar Weakness Provides the Main Driver

The recent rebound has been driven largely by broad-based US dollar weakness.

June's Nonfarm Payrolls (NFP) report showed the US economy added 57,000 jobs, well below the market consensus of approximately 110,000, prompting market participants to reduce expectations for further Federal Reserve policy tightening.

According to the CME FedWatch Tool, the implied probability of a July rate increase declined to around 18% from nearly 30% a day earlier, while expectations for a September rate increase eased to approximately 52%, compared with about 65% previously.

Australian Economic Data Also Provided Support

Australia's domestic economic data also offered support for the Australian dollar.

The S&P Global Composite PMI was revised higher to 50.4 in June from the preliminary reading of 49.8, supported by a return to expansion in the services sector (50.5 versus 48.7) and stronger manufacturing activity (51.5 compared with 50.7 initially).

The latest figures point to an improvement in business activity, although they follow a series of softer economic releases, including a record AUD 3.02 billion trade deficit in May, which had previously weighed on the currency.

Technical Picture: Recovery Within a Broader Downtrend

On the four-hour chart, the Relative Strength Index (RSI) has moved into the low-60 range, while the MACD histogram continues to strengthen.

These indicators are generally interpreted as suggesting that the recent advance may reflect a corrective recovery following previously oversold conditions.

However, the broader technical structure continues to indicate a bearish bias, with the pair trading below both its 50-day Simple Moving Average (SMA) near 0.7072 and its 200-day SMA around 0.6989, according to CoinCodex model data.

This configuration is often interpreted as suggesting that rallies may face resistance unless supported by additional bullish catalysts.

Key Levels to Watch

Resistance

  1. 0.6950 – 38.2% Fibonacci retracement of the two-week decline
  2. 0.6976–0.7000 – 50%–61.8% Fibonacci retracement zone, corresponding with mid-June lows

Support

  1. 0.6935 – Session low
  2. 0.6885 – Thursday's low
  3. 0.6865 – Key support established in June

Why It Matters for Southeast Asian Traders

AUD/USD is widely followed as an indicator of regional risk sentiment alongside ASEAN currencies.

With market attention currently focused on Federal Reserve policy expectations, next week's US inflation data could play an important role in determining the pair's near-term direction, alongside any changes in broader market sentiment.

Technical analysis and pricing data were sourced from FXStreet, Trading Economics, CME FedWatch Tool, and CoinCodex. This content is provided for informational purposes only and does not constitute investment advice.