AUD/USD drops towards 0.7300 on surprisingly downbeat Australia employment data

• AUD/USD takes offers to refresh monthly low following the downbeat Aussie jobs report.
• Australia Employment Change marked slower improvement than forecast, Unemployment Rate jumped past expectations in October.
• Market sentiment remains sour as reflation fears join US-China trade tussles and Evergrande woes, US bank holiday restricts momentum.
• Risk catalysts keep the driver’s seat amid light calendar.

AUD/USD marks a 20-pip downtick to refresh the one-month low around 0.7315, down for the third consecutive day, following the Aussie jobs figures published during early Thursday. Following the US inflation-led blow, weaker-than-expected employment data from Australia exert additional downside pressure on the quote. However, the US bank holidays restrict the market moves of late.

That said, the Australian Employment Change defied a +50.0K forecast with -46.3K figures, versus -138K prior, whereas the Unemployment Rate rose past 4.6% previous readouts and 4.7% market consensus to 5.2% in October. It’s worth noting that the Aussie Consumer Inflation Expectations for November jumped past 3.6% prior to 4.6%.

Read: Breaking: Australian jobs report is not looking good for AUD bulls

Given the Aussie jobs report allow the Reserve Bank of Australia (RBA) doves to reiterate the conditions for announcing a rate hike, even as the inflation does pick up, the AUD/USD bears seem to have a further downside to track. Also challenging the quote are the sentiment-negative headlines concerning China’s Evergrande and the Sino-American trade deal, due to the pair’s risk barometer status.

Talks that China’s struggling real-estate major Evergrande has officially defaulted as the DMSA - Deutsche Marktscreening Agentur (German Market Screening Agency), is up for preparing for the firm’s bankruptcy filing, per the Daily Express, weigh on the risk appetite. On the same line were comments from US Trade Representative (USTR) Katherine Tai citing weakness in China’s phase 1 performance. It’s worth noting that US President Joe Biden and his Chinese counterpart Xi Jinping are up for a virtual meeting in the next week.

It’s worth noting that a 30-year high US Consumer Price Index (CPI) of 6.2% YoY bolstered Fed rate hike expectations and propelled the US Treasury yields, as well as the US Dollar Index (DXY), the previous day. Though, a bank holiday in America restricts the market’s recent moves.

Even so, headlines concerning China and Evergrande may keep entertaining the AUD/USD traders.

Technical analysis

Given the AUD/USD pair’s downside break of the 61.8% Fibonacci retracement (Fibo.) of September-October upside, around 0.7320, sellers are likely set to aim for 11-week-old horizontal support near 0.7220. It’s worth noting that a convergence of the 50-DMA and the 100-DMA near 0.7370-75 acts as the key upside barrier.