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AUD/USD rose to a 5-day high towards 0.6465

The AUD/USD soared by 0.60% to the 0.6465 level, mainly driven by a USD weakness fueled by poor labor market figures from the US and markets consequently betting on sooner rate cuts by the Federal Reserve (Fed). On the AUD’s side, investors await housing data from Australia from July to be released Wednesday and the monthly Consumer Price Index (CPI) from July. The USD took a hit after the US Job Openings and Labor Turnover Survey (JOLTS) declined to 8.82 million, lower than the market's expectations of 9.465 million. It is worth noticing that the labor market situation will highly determine the short-term USD trajectory as Federal Reserve officials and Jerome Powell stated that ongoing decisions will be decided “carefully”, pointing out that the labor market is still unbalanced. That said, markets could see volatility during this week when the US reports the ADP Employment Change from August on Wednesday and the Nonfarm Payrolls report from the same month.

The US Treasury yields for the 2, 5, and 10-year bond sharply decreased, reflecting dovish bets on the Federal Reserve. In line with that, World Interest Rates Probabilities (WIRP) show that markets are still betting on high chances of a 25 bps hike in November but have pushed back rate cuts by the Federal Reserve (Fed) from July to June. Based on the daily chart, AUD/USD maintains a neutral to bullish technical perspective, indicating that the bulls are making strides in regaining control. The Relative Strength Index (RSI) shows an upward trend below its midline, suggesting a potential resurgence of bullish strength, while the Moving Average Convergence (MACD) histogram prints bigger green bars. Moreover, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), suggesting that the buyers are struggling to overcome the overall bearish trend, and the bears are still in charge.

Support levels: 0.6430, 0.6400, 0.6380. Resistance levels: 0.6475 (20-day SMA), 0.6500, 0.6525.