AUD/USD edged higher Monday, though long-positioned investors remain cautious as the pair hovers near critical support levels ahead of a busy week of U.S. employment data.

The pair is currently consolidating after dropping from its June 15 high — a bearish signal on its own — with that consolidation forming just above the key 0.6834–0.6861 support zone, which contains the 200-day moving average alongside the March and April monthly lows.

The technical picture offers little comfort for bulls. AUD/USD is trading below both the falling 10- and 21-day moving averages, and the monthly RSI points to entrenched longer-term downward momentum.

All eyes now turn to a string of U.S. labor market releases. May JOLTS job openings drop Tuesday, followed by June ADP on Wednesday, and the June payrolls report on Thursday — moved up due to the July 4th holiday on Friday. These reports will be pivotal in shaping the pair's near-term direction.

AUD/USD bulls are counting on softer jobs numbers, which could prompt markets to scale back expectations for Fed hawkishness. That would likely push U.S. yields and SOFR futures rates lower, weighing broadly on the dollar and potentially driving AUD/USD up toward the June high of 0.7190.

Conversely, a strong jobs print would reinforce dollar strength and could send the pair sliding toward the 0.6600 level.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)