Australian Dollar falls after weak NFP data fuels risk aversion

• Australian Dollar weakens as disappointing US labor data increases risk-off sentiment.
• US NFP report came in below forecasts, while wages slowed, raising concerns over economic resilience.
• China's trade data revealed weaker imports, amplifying pressure on the Aussie.
• Technical indicators suggest increasing downside risk as AUD/USD approaches key support levels.

The Australian Dollar extended losses on Friday against the USD after the release of the US Nonfarm Payrolls (NFP) report. The AUD/USD pair struggled to recover as risk sentiment deteriorated with traders reacting to weaker-than-expected job growth and softer wage gains. Meanwhile, China's trade balance data showed an unexpected drop in imports, raising concerns over slowing demand, which weighed further on the Australian Dollar.

Daily digest market movers: Australian Dollar under pressure after NFP miss

• The US Nonfarm Payrolls report showed job creation slowed in February with 151,000 new jobs added, falling short of the 160,000 estimate. While still an improvement from January's 125,000 figure, the weaker hiring pace raised concerns about labor market resilience.
• Average Hourly Earnings growth eased to 0.3% MoM, down from 0.4% in January, reinforcing expectations that wage pressure may be cooling. Meanwhile, the US Unemployment Rate edged up to 4.1%, signaling potential softening in labor conditions.
• China's trade surplus widened to $170.52 billion in February, exceeding forecasts. However, a sharp 8.4% decline in imports raised concerns over weakening domestic demand, which could negatively impact Australia's export-driven economy.
• The Reserve Bank of Australia (RBA) maintains a cautious outlook, expecting economic growth to moderate toward 2% by 2025. While this stance has supported AUD in the past, investors are becoming wary of possible policy shifts in response to inflation and labor market conditions.
• Risk sentiment soured as investors reassessed global trade developments. Canada delayed its planned second round of retaliatory tariffs against the US until April 2, following exemptions granted to Mexican and Canadian goods under the USMCA agreement. This development provided only temporary relief with broader concerns about global trade tensions persisting.

AUD/USD Technical Analysis: Selling pressure mounts as key support nears

The Australian Dollar extended its decline on Friday, dropping toward the 0.6290 region during the American session as selling pressure intensified. The pair failed to maintain its previous levels after the weaker-than-expected US NFP report increased market caution, prompting further downside movement.

The Moving Average Convergence Divergence (MACD) indicator continues to print decreasing red histogram bars, signaling weakening bullish momentum. Meanwhile, the Relative Strength Index (RSI) has fallen to 53, declining sharply but still above neutral levels. If the RSI continues to slide, it could confirm further downside risks.

A confirmed drop below the 0.6300 support zone could open the door for further losses with the next key level around 0.6270. On the upside, resistance remains at 0.6365 with a break above this level required to shift sentiment back toward the bulls.