AUD/USD Forecast 16/10: Jobs Shock Puts 0.6850 At Risk

(MENAFN- Daily Forex) The AUD/USD pair continues to be an interesting one to follow, especially now, as the Australians shed a whopping number of jobs last month. Rate expectations are shifting in Oz/USD

The Aussie dollar has fallen pretty significantly during the trading session here on Thursday, as the Australians reported a huge miss in their employment report. They lost over 39,000 jobs last month, compared to the expected gain of 19,600 jobs.

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With that, it's obvious that the Australian dollar took a little bit of a beating, especially as interest rates in the United States have dropped. One would think that the Aussie would, under most circumstances, take advantage of that, but that's such an egregious miss in employment that traders are really watching that closely.

RBA rate hike expectations are falling rapidly

The Australian central bank, the RBA, was expected to raise rates between now and the end of the year. At one point in the last couple of days, the RBA had about a 45% chance of raising rates at the November meeting, which had been falling a bit. But now, after the employment number, it fell to something like 10% the last time I checked.

This suggests that we may have some downward pressure here. If rates in America start to climb on top of this, that could have the Australian dollar challenging the crucial 0.6850 level. That's an area that has been the bottom of a longer-term consolidation area that extends all the way to the 0.7250 level. Breaking down below there would be a very negative sign.

EURUSD Chart by TradingView

In the meantime, though, we are starting to see a little bit of bottom fishing here. We'll see if buyers come in and pick up the Aussie. But as things stand right now, it's a dangerous place to play.

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