AUD/USD Forecast: 0.7018 as Jobs Beat 5x Consensus Raises RBA Hike Odds to 50% by December
AUD/USD at 0.7018 after +76,300 jobs vs +15,000 consensus. RBA hike odds at 50% by December. Ascending triangle at 0.7023 and ECB risk...
Quick overview
- AUD/USD is trading at 0.7018 following a significant employment change of +76,300 in June, far exceeding the expected +15,000.
- The RBA has raised rates three times in 2026 to 4.35%, with markets now pricing in a 23% chance of a hike in August and over 50% by December.
- The strong employment data suggests a tight labor market, making rate cuts unlikely in the near future.
- Technical analysis indicates that a breakout above the resistance level of 0.7023 could lead to further gains for AUD/USD.
At the opening of Asian trading on July 23, AUD/USD is changing hands at 0.7018 as of today, following better than expected employment change +76,300 in June, five times higher than the consensus +15,000 expectation, and with unemployment rate unchanged at 4.4% month-on-month. The RBA has already done three hikes in 2026 to 4.35%.
Now the markets are giving 23% chance of a rate hike in August and more than 50% in December. This is no longer a cut story. It is a rate hike story.
The Employment Beat That Changes the RBA Narrative
Employment data shows Australian Bureau of Statistics released its June Employment Change, which was +76,300, exceeding market consensus of +15,000, including the most hawkish, while unemployment rate held steady at 4.4% for a second consecutive month, marking another 4.4%. The consensus was 15,000, making this a five standard deviations beat of the consensus in a 2026 cycle. Prior to the news release, the markets already expected a rate increase of +25bp in August and by December, the probability had reached +50%. The RBA hiked rates three times in 2026 at +25bp each to +4.35% as of the June meeting, while it was kept unchanged as of June.
Today’s reading confirms the odds of a rate hike. The jobs number is for a labor market that is adding 76,300 jobs in a month in an economy of 27 million. This doesn’t look like a situation conducive to rate cuts any time soon.
On top of that, the energy inflation channel continues to push on RBA policy. US-Iran conflict resume, which increases the energy costs for the net importer of energy Australia, adding to services inflation which is the major driver of inflation which the RBA has repeatedly stated was sticking to a level above target. It might be possible that we will see a revision higher of the peak in RBA cash rate, which was around +3.85% according to what the market priced before the Iran conflict resumed.
Check out the FXLeaders economic calendar for more details.
There are two more upcoming releases to watch today: Wage Price Index, expected quarterly +0.8%, year on year 3.4%, and RBA minutes. Neither release is expected to make a huge impact today, but if Wage Price Index were to turn out higher than 0.9% quarterly, it would add another hawkish data point in the same week.
AUD/USD Technical Analysis: Ascending Triangle at 0.7023 Resistance
On the chart, AUD/USD is currently trading at 0.7018 while forming an ascending triangle, sitting just shy of the resistance ceiling at 0.7023. Both the 50 EMA (0.6997) and 200 EMA (0.6975) are positioned below price action, indicating that buyers are maintaining short-term dominance.
Resistance Levels: 0.7023 (upper trendline of the triangle), followed by 0.7035 and then 0.7048.
Support Levels: 0.7000 (psychological level), then 0.6984, with 0.6970 acting as the base of the ascending triangle.
The Relative Strength Index (RSI) sits around 62, showing momentum building while still avoiding overbought territory. If the pair breaks through the triangle, there is plenty of room left for gains.
Trading Plan: Go long if the price clears 0.7023. Take profit around 0.7035 to 0.7048 and place stops under 0.6984.
Later today, the ECB’s stance is another variable to watch. If the ECB signals a hawkish position and hints at a rate increase in September, the euro will strengthen and the dollar will decline slightly, providing additional AUD/USD tailwind. A neutral ECB stance keeps the current scenario in play. Even with today’s encouraging economic data for the Australian economy, AUD/USD may continue to be capped by the overall US dollar strength.
FAQ: AUD/USD July 23; Employment Beat, RBA Hike Odds, and ECB Impact
Employment data comes through stronger than expected, RBA rate hikes are now more likely, and what will happen next week when the ECB is due.
Why did +76,300 Australian jobs move AUD/USD when unemployment didn’t change?
Employment change is a flow variable; unemployment is a stock variable. The 76,300 addition represents a very large increase in five times the average consensus. This confirms strong corporate hiring growth despite the RBA’s 2026 rate increases.
Unemployment rate unchanged at 4.4% means labor supply is increasing with labor demand and the tight labor market is confirmed, not distorted by the labor supply/demand distribution change. The labor market has both strong growth and no change in unemployment, which is the ideal for the forex market to be hawkish.
What does today’s data mean for RBA rate hike probability?
Before today’s data release, the market priced in a 23% probability of an RBA rate hike in August, and greater than 50% probability of a rate hike by December. Today’s +76,300 employment beat will likely move both those numbers up, with more hikes coming down.
With the RBA at 4.35% (after three hikes in 2026), we have the inflation rate remaining above the 2 to 3% band, and the economy remaining tight and growing. This is a significant shift in the likelihood of the RBA rate hike, which means that AUD/USD remains supported.
What is the AUD/USD outlook heading into next week’s FOMC?
Today’s trading range will see a test of the current triangle breakout at 0.7023. Once this occurs, 0.7035 to 0.7048 are the likely areas to target. The January 2026 upward trend line sits at 0.7025. A break above this level as well would be indicative of a resumption of the upward trend. It would open the door to the June 2022 high of 0.7282.
With the FOMC on July 29 to 30 approaching, an unchanged Fed with softer Warsh language on September hikes would weaken the dollar and accelerate the AUD/USD breakout; unchanged with hawkish tone maintains the current 0.6970 to 0.7023 range.
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