The Australian dollar remains vulnerable in the short term and Wednesday's big in September's employment report is just one factor weighing on the currency.
The the Reserve Bank of Australia was justified in scaling back the pace of rate hikes to 25 basis points from 50 this month.
Unless Australia's Q3 CPI to be released next week is above expectations, it seems unlikely that the Australian central bank will be opting for any more jumbo hikes in this cycle.
The outlook for the U.S. is far more hawkish, with the market pricing in two more 75 bps hikes before the end of 2022.
Central bank expectations aside, it will be hard for the AUD/USD to rally sustainably while and growth forecasts for China get as they persist with strict COVID containment policies.
The AUD/USD will likely test the 2022 trend low at 0.6170 and a break targets the 76.4% Fibonacci retracement of the 2020-2021 rise at 0.6099. Only a break above the 21-day moving average at 0.6392 would suggest the downtrend has run its course.
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