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Published: 21 May 2026,07:33
Daily Market Analysis New
*The Australian Dollar comes under pressure after weaker-than-expected labour data showed a higher unemployment rate and negative employment growth.
*Soft jobs figures challenge the RBA’s hawkish stance, raising concerns that economic conditions may be weakening faster than policymakers anticipated.
*AUD outlook turns cautious, with markets likely to reassess rate expectations while upcoming inflation data and commodity prices remain key drivers.
The Australian dollar (AUD) encountered notable pressure following the release of the latest labour force data, which revealed an unemployment rate higher than market expectations alongside a negative employment change. This outcome stands in contrast to the hawkish tone of the recent Reserve Bank of Australia (RBA) meeting minutes, which highlighted persistent inflation risks and a willingness among board members to consider further tightening if needed.
The weaker-than-anticipated jobs figures signal a cooling in labour market conditions, with rising unemployment pointing to moderating demand for workers amid higher interest rates and subdued economic activity. A contraction in employment underscores challenges in sustaining job growth, particularly in certain sectors, even as full-time roles have shown some resilience in prior periods. This development introduces downside risks to domestic consumption and growth, potentially complicating the RBA’s inflation-fighting efforts.
The divergence from the RBA minutes is significant. While the central bank has emphasised the need for additional labour and product market loosening to anchor inflation expectations, the latest data suggests the economy may already be experiencing faster softening than anticipated. Markets had priced in a relatively resilient outlook aligned with the hawkish minutes, supporting the AUD through expectations of higher-for-longer rates. However, the soft jobs print increases the likelihood of earlier or more substantial policy easing, eroding that support.
In the coming weeks, the currency is likely to trade under pressure, with potential for further downside against the US dollar if upcoming data, including inflation readings and retail sales, reinforce signs of economic moderation. Commodity prices, particularly iron ore and energy, will provide some buffer given Australia’s export profile, but global risk sentiment and US dollar strength could amplify headwinds. Traders will closely monitor the RBA’s response for any shift in rhetoric toward greater data-dependence.
Technical Analysis
EUR/AUD has displayed a notable trend reversal pattern, with the pair staging a strong rebound and successfully breaking above a key liquidity zone while also surpassing its downtrend resistance line. This price action suggests that the previous bearish structure has been invalidated, indicating a potential shift toward a more bullish market outlook.
The breakout above the downtrend trajectory highlights strengthening buying momentum and signals that market sentiment may be turning increasingly constructive. In addition, the pair is currently sustaining above the previously breached liquidity zone, which has now potentially transformed from resistance into a support area.
Going forward, the next key level to monitor is the previous high near 1.6365. A decisive break above this previous peak level would provide stronger confirmation of the bullish reversal scenario and further reinforce the positive bias for the pair, potentially opening the path for additional upside extension.
As long as EUR/AUD continues to hold above the former liquidity zone, the broader near-term outlook is likely to remain supportive of further gains.
Resistance Levels: 1.6522, 1.6810
Support Levels: 1.6150, 1.6000
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