• The Australian Dollar continues to face pressure against the US Dollar amid firm Fed rate hike prospects.
• Investors await the US PCE Inflation for fresh cues on the Fed’s monetary policy outlook.
• Australian employers hired 40.3K fresh workers in May, beating 25K estimates.

The AUD/USD pair trades marginally lower to near 0.6890 during the European trading session on Thursday. The Aussie pair faces slight selling pressure as the US Dollar (USD) remains broadly firm due to expectations that the next monetary policy adjustment by the Federal Reserve (Fed) will be on the upside.

At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly around 101.55, but is close to its over-a-year high of 101.80 posted on Wednesday.

According to the CME FedWatch tool, the odds of the Fed hiking interest rates this year are almost 82%.

Meanwhile, investors await the United States (US) Personal Consumption Expenditure Price Index (PCE) data for May, which will be published at 12:30 GMT. Investors will closely monitor the data to get fresh cues regarding the US interest rate outlook.

In Australia, the labor market data for May has come in better than projected. Earlier in the day, the Australian Bureau of Statistics reported that the economy created 40.3K fresh jobs, higher than 25K estimates. In April, there was a reduction in the overall laborforce as 40.7K workers laid-off, revised higher from 18.6K. The Unemployment Rate drops to 4.4%, as expected, from the previous reading of 4.5%.

AUD/USD technical analysis

AUD/USD trades lower at around 0.6890, maintaining a bearish near-term bias as spot holds beneath the 20-day Exponential Moving Average (EMA) at 0.7025. The pair has been sliding away from the short-term trend indicator, and the Relative Strength Index (RSI) at 26.6 sits in oversold territory, hinting that while downside pressure dominates, conditions are stretched after the recent decline.

On the topside, initial resistance is located at the 20-day EMA around 0.7025, which needs to be reclaimed to ease the immediate bearish tone. Looking down, the March 30 low at 0.6833 will be the key support zone; a downside move below the same would expose the pair to the January 7 high at 0.6766.

(The technical analysis of this story was written with the help of an AI tool.)