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The Australian dollar came under intense pressure on Wednesday as investors waited for the upcoming jobs data. The AUD/USD price crashed to a low of 0.6700, which was sharply lower than its highest level this week.
Australian jobs data next
The Aussie dropped sharply as investors focused on the soaring American inflation data and the possibility of more tightening in the US. Data published on Tuesday and Wednesday revealed that the headline consumer and producer inflation remained at an elevated level.
As a result, analysts believe that the Federal Reserve will have the incentive to continue hiking rates in the coming months. Precisely, they expect that the bank will hike by either 50 or 75 basis points in the coming meeting. It will then conclude the year with two 50 basis point hike, bringing the year-to-date increase to 400 basis points.
The next key catalyst for the AUD/USD pair will be the upcoming Australian jobs data scheduled for Thursday. Economists polled by Reuters expect the data to show that the economy added over 40k job in August while the unemployment rate remained unchanged at 3.4%.
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Therefore, the Reserve Bank of Australia (RBA) will continue hiking interest rates in the coming months. It has risen in the past few months and hinted that more hikes are on their way.
Finally, the AUD/USD exchange rate will react to a slew of economic data from the US. The US will publish the latest retail sales, export, and import price index, jobless claims, and industrial production numbers.
AUD/USD forecast
The AUD/USD pair crashed to a low of 0.6700 as concerns about the US inflation data continued. It then rose slightly to a high of 0.6760. The pair moved below all moving averages while the Relative Strength Index (RSI) continued falling.
Therefore, the pair will likely continue falling as sellers target the next key support level to watch will be at 0.6600. A move above the resistance level at 0.6800 will invalidate the bearish view.
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