AUD/USD Forex Signal: Extremely Bullish Above 0.6590
The AUD/USD currency pair has shown a notable degree of resilience in the forex market, maintaining a tight trading range as traders and investors brace for pivotal macroeconomic data from the United States.
The pair hovered around 0.6580, just a few pips below the weekly high of 0.6591, reflecting cautious market sentiment ahead of the highly anticipated Nonfarm Payrolls (NFP) report. Technical and fundamental indicators alike suggest that a bullish breakout is highly probable if the pair decisively moves above 0.6590.
The experts at Servelius offer an in-depth analysis of this subject in their article.
US Nonfarm Payrolls Data: Key Market Driver
The dominant market catalyst this week is the upcoming US NFP report, scheduled for release on Friday. This monthly employment report, released by the Bureau of Labor Statistics (BLS), is among the most closely watched economic indicators in the forex market.
The current consensus among economists is for the US economy to have added 110,000 jobs in June, down from the 139,000 jobs created in May. Additionally, the unemployment rate is expected to tick up to 4.3%, slightly above the previous month’s 4.2%.
Another key metric, average hourly earnings, is forecasted to show a year-over-year increase of 3.9%, which would be a critical indicator of wage inflation and labor market tightness.
ADP Employment Report Signals Weakness
In a precursor to Friday’s NFP data, the ADP National Employment Report, released on Wednesday, showed a surprising contraction in private sector employment. According to ADP, the US private sector shed 33,000 jobs in June, a sharp reversal from the 29,000 job gain recorded in May.
This marked the first monthly decline in private employment in two years, raising alarms about a potential softening labor market.
ADP analysts noted that while mass layoffs remain relatively rare, corporate hiring hesitancy is on the rise. Companies appear increasingly reluctant to replace departing employees, likely due to economic uncertainty and geopolitical risks. High-profile job cuts, such as Microsoft’s decision to lay off over 9,000 employees, mostly from its Xbox division, further underline these concerns.
Other Economic Indicators to Watch
Beyond NFP, traders will also focus on the upcoming ISM Non-Manufacturing PMI and S&P Global Services PMI. The ISM services index is forecast to increase modestly from 49.9 to 50.5, which would indicate a return to expansion territory. Conversely, the S&P services PMI is expected to dip slightly from 53.7 to 53.1, suggesting slowing momentum in the services sector.
The services sector accounts for more than 70% of US GDP, so these figures are highly relevant to broader economic sentiment and monetary policy decisions. A combined set of weak employment and services data could trigger a dovish pivot from the Federal Reserve, reinforcing the bearish outlook for the USD and bolstering the bullish case for AUD/USD.
AUD/USD Technical Analysis: Focus on 0.6590 Breakout
From a technical standpoint, the AUD/USD exchange rate remains within a narrow range, exhibiting signs of consolidation. As of Thursday morning, the pair was trading around 0.6581, comfortably above last month’s low of 0.6375.
A closer look at the 12-hour chart reveals that the price has moved above the 61.8% Fibonacci retracement level, a critical area that often acts as a pivot zone for bullish or bearish trends. Furthermore, the pair remains above the 50-period moving average (MA50), reinforcing a near-term bullish bias.
Price action is currently approaching the upper boundary of the short-term price channel, and a decisive breakout above the resistance level at 0.6590 would confirm a bullish continuation. In that scenario, the next key resistance level to watch is 0.6700, which represents a psychological and technical barrier.
Alternatively, if the pair fails to break above 0.6590 and instead reverses lower, the first level of support lies at the 50-period MA near 0.6500. A break below this level could open the door for further downside toward 0.6450, aligning with the lower end of the current consolidation zone.
Conclusion: Bullish Outlook Hinges on 0.6590 Break
In summary, the AUD/USD pair is at a critical juncture, with both technical signals and macro fundamentals aligning around a potential breakout. The resistance level at 0.6590 serves as the pivot point for a strong upward move.
A confirmed break above this threshold, supported by weaker-than-expected US employment data or dovish Fed commentary, could propel the pair toward 0.6700 in the short term.
Given the current market conditions, sentiment leans bullish; however, confirmation via a technical breakout and soft US data remains essential. A sustained move above 0.6590 would mark a clear buy signal in the AUD/USD market.
