AUD/USD Faces Sustained Selling Pressure; Support Remains Intact Before US Employment Report

2025-12-24 23:58:00

Abstract generation in progress

The Australian Dollar weakened against the US Dollar for the fourth straight session, trading near 0.6630 and posting modest losses during Asia’s trading hours. Multiple headwinds have combined to test the pair’s resilience in recent days.

Multiple Pressures Weighing on the Aussie

Last week’s employment report from Australia failed to inspire confidence, while fresh economic data from China spooked markets about the world’s second-largest economy. These developments have dampened sentiment toward risk-sensitive currencies like the AUD. The broader equity market pullback has further amplified selling interest in the Australian Dollar, as risk appetite deteriorates across global financial markets.

However, the downside appears limited at current levels. The Reserve Bank of Australia’s firm monetary stance provides a crucial support mechanism for the AUD. Governor Michele Bullock’s recent comments reinforced that further rate reductions may not materialize, and the central bank remains open to future tightening if needed. This hawkish positioning contrasts sharply with market expectations for additional Federal Reserve rate cuts.

Dollar Weakness Offers Countervailing Support

The US Dollar Index has tumbled to levels last seen in early October, reflecting market sentiment that the Federal Reserve will continue its easing cycle. The greenback’s weakness appears structural rather than temporary, particularly given speculation about a dovish successor to Fed Chair Jerome Powell. This technical backdrop seems to provide a floor for AUD/USD, preventing deeper deterioration despite current headwinds.

Market Awaiting Key Data Point

The delayed October US Nonfarm Payrolls report represents a critical juncture ahead. Market participants appear hesitant to establish aggressive positions until this employment data hits the wires. The confluence of divergent policy paths—Australia’s relative tightness versus American easing expectations—suggests the pair may consolidate near current levels pending this significant economic release.

The risk-reward setup appears balanced until clearer directional conviction emerges from the upcoming employment figures.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.