16 October 2025,03:12
Daily Market Analysis
16 October 2025, 03:12
*Softer labor market data — unemployment rising to 4.5% and modest job gains — reinforced the RBA’s dovish stance and reduced rate support for the Aussie.
*Subdued Chinese CPI confirmed persistent deflationary risks and weak demand, threatening Australia’s export outlook.
*AUD remains vulnerable amid lingering U.S.–China trade tensions.
Market Summary:
The Australian dollar remains under significant pressure this week, trading within a lower range around 0.6450-0.6500 against the USD. This weakness is primarily driven by a confluence of domestic and external factors that have solidified a bearish near-term outlook.
Domestically, the recently released labor market data failed to meet expectations, with the Unemployment Rate ticking up to 4.5% and Employment Change coming in at a modest 14.9k. This softness directly validates the concerns explicitly outlined in the latest RBA meeting minutes, where the central bank highlighted the labor market as a key focus. The data reinforces the market’s expectation that the RBA will maintain a data-dependent and increasingly dovish policy stance, eroding interest rate support for the currency.
Externally, the Aussie’s weakness is compounded by softer-than-anticipated economic data from China, a critical trading partner. The latest Chinese CPI reading signals ongoing deflationary risks and sluggish domestic demand, which threatens to slow demand for Australian exports and further dampens the currency’s fundamental outlook.
With domestic data aligning with the RBA’s cautious narrative and external demand concerns mounting, the Australian dollar is poised for a bearish trajectory in the near term. Market participants will also closely monitor the development of U.S.-China trade tensions, which pose a significant spillover risk to Australia’s export-dependent economy.
The AUDNZD pair has concluded its period of consolidation with a decisive breakdown, signaling a likely bearish trend reversal. The pair has breached two critical technical levels: the strong horizontal support zone near 1.1330 and its long-term uptrend support line. This dual breakdown invalidates the prior sideways structure and suggests a significant shift in market sentiment from neutral to bearish.
The bearish outlook is reinforced by deteriorating momentum indicators. The Relative Strength Index (RSI) is consistently hovering below its mid-point, reflecting a lack of bullish strength. Concurrently, the Moving Average Convergence Divergence (MACD) is exhibiting a pattern of lower highs and is poised to cross below its zero line. This technical configuration indicates that a fresh wave of bearish momentum is now emerging, supporting the case for further downside. The breach of these key supports opens a path for the pair to target lower levels, with the next significant support zone becoming the primary focus.
Resistance Levels: 1.1340, 1.1412
Support Levels: 1.1270, 1.1214
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