Australian dollar steady ahead of employment report

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<li>AUD/USD extends losses</li>
<li>Australia releases jobs report on Thursday</li>
</ul>
<p>The Australian dollar can’t buy a break. AUD/USD hasn’t posted a winning session since August 7^th and has declined 120 basis points during that time. In Wednesday’s European session, AUD/USD is trading at 0.6450, down 0.07%.</p>
<p>Australia releases the July employment report on Thursday, a release which could shake up the sleep Aussie. The labour market is expected to show signs of slowing down. Job growth is forecast to drop to 15,000, down from 32,600 in June, while the unemployment rate is projected to nudge higher to 3.6% in July, up from 3.5% in June.</p>
<p>The labour market has remained strong despite the Reserve Bank of Australia’s aggressive tightening. Softer employment numbers would be an encouraging sign for the central bank, which has paused rates for two straight times and would like nothing more than to wrap up the current rate-tightening cycle and maintain rates until the timing is appropriate for lowering rates.</p>
<p>China, the world’s number two economy is showing signs of weakness. The economy is experiencing deflation and recent releases have been pointing downwards. The People’s Bank of China has responded by cutting key policy rates in an attempt to kick-start the sputtering economy. The surprise move by the central bank has raised speculation that it could trim the 5-year lending prime rate (LPR) next week. An interesting silver lining to Chinese deflation is it could help lower global inflation at a time when major central banks are looking to wind up tightening cycles due to high inflation.</p>
<p>The US released a robust retail sales report on Tuesday, an indication of a strong US economy which may force the Fed to continue raising rates. Headline retail sales rose 0.7% m/m in July, but core retail sales stole the show with a massive 1% gain up from an upwardly revised 0.4% in June.</p>
<p>.</p>
<p><strong>AUD/USD Technical</strong></p>
<ul>
<li>AUD/USD is testing support at 0.6449. This is followed by support at 0.6402</li>
<li>0.6532 and 0.6579 are the next resistance lines</li>
</ul>
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