Australian Dollar weakens as AUD/USD slips below 0.6300 amid economic concerns

• AUD/USD falls sharply, breaking below the 0.6300 mark as selling pressure builds.
• Australia's employment report reveals unexpected job losses, weighing on sentiment.
• The US Dollar strengthens after the Federal Reserve signals persistent inflation risks and maintains a cautious stance.
• Technical indicators suggest further downside, with the pair trading below key moving averages.

AUD/USD decline accelerates as the labor market weakens and the US Dollar (USD) strengthens. The pair is falling sharply on Thursday, slipping beneath a key support level as Australia's labor market unexpectedly deteriorated. The latest employment report showed a significant drop in job figures, raising concerns about the country's economic outlook. Meanwhile, the US Dollar remained resilient after the Federal Reserve (Fed) reaffirmed its stance on keeping rates restrictive, reinforcing expectations that monetary policy will remain tight for an extended period.

Daily digest market movers: Australian Dollar struggles as weak labor data pressures sentiment

• Australia's labor market showed signs of weakness in February, with payrolls shrinking by 52.8K, a stark contrast to market forecasts of a 30K increase. The unemployment rate remained unchanged at 4.1%, but the downturn in job creation heightened concerns about economic resilience.
• The US Dollar extended its gains, with the US Dollar Index (DXY) surpassing 104.00 as market participants digested the Federal Reserve's latest policy statement. The Fed held interest rates steady in the 4.25%-4.50% range while maintaining its projection for two rate cuts later this year, reflecting persistent concerns over inflation.
• Uncertainty surrounding US trade policy continues to weigh on risk-sensitive currencies like the Australian Dollar. With investors closely monitoring potential retaliatory actions from global trade partners, fears of a broader economic slowdown remain elevated. Given Australia's reliance on commodity exports to China, any weakness in Chinese demand could place additional downward pressure on the Aussie.
• The Reserve Bank of Australia (RBA) remains cautious, monitoring inflation trends and global trade risks before committing to further policy adjustments. While the central bank cut rates by 25 basis points in February, future decisions will depend on evolving economic conditions.
• Market attention now shifts to upcoming US labor market data, with Initial Jobless Claims coming in at 223K, aligning closely with projections. Investors will continue assessing the strength of the US labor market to determine the Fed's next moves.

AUD/USD Technical Analysis: Bearish pressure intensifies as key support levels break

The AUD/USD pair extended its retreat on Thursday, hovering near the 0.6300 zone during the American session as sellers dominated price action. The pair dropped below both the 20-day and 100-day Simple Moving Averages (SMA), reinforcing a negative outlook.

The Moving Average Convergence Divergence (MACD) indicator showed a decline in green bars, signaling weakening bullish momentum. Meanwhile, the Relative Strength Index (RSI) fell to 49, slipping into negative territory, which confirms growing downside risks.

Immediate support appears near 0.6280, where some demand may emerge. If bearish momentum persists, the next downside target lies around 0.6220. On the upside, resistance is seen near 0.6340, with further advances likely to be met with selling interest.