AUD/USD Breaks Rectangle Pattern as Australian Labor Data Shines

Thursday brought fresh momentum to the Australian Dollar, with the AUD/USD pair trading near 0.6560 as positive employment figures from Down Under reignited buying interest. Here’s why traders are watching this closely—and what might come next.

The Data That Moved Markets

Australia’s employment report landed with some real teeth. The unemployment rate dropped to 4.3% in October, beating the expected 4.4% and down from 4.5% the prior month. But here’s the kicker: employment change came in at 42.2K, absolutely crushing the 20K forecast. Full-time employment surged 55.3K, though part-time jobs dipped 13.1K. The participation rate held steady at 67%.

This wasn’t just a win for employment numbers—it signaled that the Reserve Bank of Australia’s (RBA) restrictive policy stance may still have room to work. Deputy Governor Andrew Hauser noted the committee continues to debate whether current policy remains “mildly restrictive,” hinting at potential policy adjustments ahead.

Why the US Dollar is Also Climbing

Meanwhile, the US Dollar Index (DXY) extended gains to around 99.60 as the government shutdown saga showed signs of resolution. The House voted 222 to 209 to approve a funding package, clearing the path toward ending the longest US government shutdown in history. With President Trump already backing the bipartisan deal, market sentiment shifted toward normalization.

Adding to this: President Trump projected inflation could reach 1.5% “pretty soon”—a level unseen for nearly four years. While weak ADP employment data (showing average weekly job losses of 11,250) suggested the Fed might ease policy, the broader market optimism around shutdown resolution propped up the greenback.

China’s Trade Moves Ripple Across Markets

From Beijing, there’s a twist. China’s Ministry of Commerce temporarily lifted its ban on exporting gallium, germanium, antimony, and super-hard materials to the US—a ban that had weighed on growth sentiment. The suspension runs until November 27, 2026. Since China is Australia’s largest trading partner, any policy shift there has immediate ripple effects on the AUD.

China’s Consumer Price Index climbed 0.2% year-over-year in October, recovering from September’s -0.3% decline—above the consensus of 0%. However, the Producer Price Index fell 2.1% YoY, slightly better than expected -2.2%.

Consumer Confidence Hits 7-Year High

Back in Australia, the Westpac Consumer Confidence index jumped 12.8% in November to 103.8—surpassing the 100 milestone for the first time since February 2022. That’s the strongest non-pandemic reading in seven years, a signal that households are feeling more optimistic about economic conditions.

Technical Setup: Rectangle Pattern in Focus

On the daily chart, AUD/USD is consolidating within a rectangular range, trading above the nine-day EMA and suggesting solid short-term bullish bias. The pair is eyeing the rectangle’s upper boundary near 0.6630. A clean break above that level could accelerate towards the 13-month high of 0.6707, last seen on September 17.

If the bulls falter, immediate support sits at the 50-day EMA (0.6537), followed by the nine-day EMA at 0.6531. Breaking below these would weaken momentum and drag the pair toward the rectangle’s lower bound around 0.6470 and the five-month low of 0.6414 from August 21.

Currency Strength Snapshot

The Australian Dollar showed mixed performance against major currencies. AUD strengthened most against the New Zealand Dollar, while posting modest gains against USD and the broader basket. The heat map reveals AUD’s relative positioning: strongest versus NZD (+0.40%), trailing against CHF but steady against EUR and GBP.

The Bottom Line

Australian employment data delivered the goods, supporting AUD strength while global shutdown optimism buoyed the greenback. Traders are watching whether AUD/USD can break through 0.6630 resistance—a move that could set the stage for a run toward 0.6707. Keep an eye on RBA policy signals and any fresh US economic data for direction.