AUD/USD remains under pressure above 0.6500 ahead of Chinese Services PMI data

• AUD/USD loses traction near 0.6511 on the firmer US Dollar. 
• The US Nonfarm Payrolls came in better than expected in January, Unemployment was flat.
• The Reserve Bank of Australia (RBA) is anticipated to leave its Cash Rate Target unchanged at 4.35% on Tuesday. 
• Investors will watch the January Australian TD Securities Inflation, Chinese Caixin Services PMI, and US ISM Services PMI, due on Monday. 

The AUD/USD pair remains under some selling pressure during the early Asian session on Monday. The stronger-than-expected US job data led to an uptick in the US Dollar (USD), which weighs on AUD/USD. The pair has reached fresh yearly lows of 0.6502 and edged slightly higher to 0.6511. Investors await the Chinese Caixin Services PMI for January, due later on Monday.

Data released from the US Bureau of Labor Statistics (BLS) on Friday revealed that the US economy added 353,000 jobs in January from the previous reading of 333,000, above the market consensus of 180,000. Meanwhile, the Unemployment Rate remains steady at 3.7%, missing the expectation of 3.8%.

The figures indicated that the US Federal Reserve (Fed) will need to keep interest rates higher for longer than the market anticipates. Markets pricing for a May rate cut fell to roughly 85% odds, down from fully priced the day before. The market has also trimmed its overall forecast for rate cuts in 2024. This, in turn, boosts the Greenback and acts as a headwind for the AUD/USD pair.

On the Aussie front, the latest data from Judo Bank and S&P Global on late Sunday reported that the nation’s Composite Purchasing Managers Index (PMI) improved to 49.0 in January from 48.1 in December, while the Services PMI climbed to 49.1 from 47.9 in the previous reading.

The Reserve Bank of Australia (RBA) is expected to keep its Cash Rate Target unchanged at 4.35% at its policy meeting on Tuesday. RBA Governor Bullock is set to speak at a press conference about the decision and monetary policy outlook. The hawkish remarks from the Australian central bank might cap the downside of the AUD against its rivals.

Market players will monitor the January Australian TD Securities Inflation, Chinese Caixin Services PMI, and US ISM Services PMI data on Monday. The focus will shift to the RBA interest rate decision on Tuesday. Traders will take cues from these events and find trading opportunities around the AUD/USD pair.