Australian Dollar Steady as Policy and Jobs Data Loom

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: January 21, 2026

Key Moments

First, the US Dollar remains under pressure after Trump escalated tensions over Greenland, unwinding recent hawkish USD positioning.
Meanwhile, the Reserve Bank of Australia has adopted a more hawkish tone, with markets pricing a 29% chance of a February rate hike.
As a result, AUDUSD rebounded from support near 0.6665, while traders now focus on labor data and key policy signals.

Fundamental Overview

US Dollar: Weakness Amid Policy Uncertainty

The US Dollar weakened against major peers early this week after Trump escalated rhetoric over Greenland. As a result, markets have revived concerns around de-dollarisation and US policy credibility.

At the same time, traders have started to unwind earlier bullish USD positions. Those bets followed a brief hawkish repricing that has now faded.

However, this shift does not fully erase the prior bullish narrative. If tensions ease, the US Dollar could stage a relief bounce. Stronger economic data in coming weeks would also support that move.

Meanwhile, attention turns to Davos, where Trump will speak at the World Economic Forum. He is also set to meet global leaders. Traders are watching closely for headlines or social media posts that could spark sharp FX moves.

Australian Dollar: Supported by Hawkish RBA Expectations

On the Australian side, the AUD remains supported by a more hawkish Reserve Bank of Australia. That shift followed several inflation readings that surprised to the upside.

During the latest meeting, policymakers discussed whether a rate hike may become necessary in 2026. As a result, markets now price a 29% chance of a February hike and 38 basis points of tightening by year-end.

Next, focus turns to Australia’s employment report due tomorrow. While the RBA prioritizes quarterly inflation data, labor figures still matter. A large surprise could shift rate expectations.

Given current sentiment, a weak jobs report would likely weigh more heavily on the AUD. In contrast, strong data would reinforce the hawkish bias and support further gains.

AUDUSD Technical Analysis – Daily Timeframe

On the daily chart, AUDUSD bounced from support near 0.6665. The move followed renewed geopolitical tensions tied to Greenland.

However, the daily timeframe offers limited guidance from here. Therefore, lower timeframes provide clearer trade levels.

AUDUSD Technical Analysis – 4-Hour Timeframe

The 4-hour chart shows a strong rebound from the 0.6665 support zone. Notably, price has erased all of January’s earlier US Dollar gains.

From a risk perspective, buyers may favor pullbacks toward support. These levels offer cleaner risk-reward setups for upside continuation.

On the other hand, sellers need a clear break below 0.6665. A sustained move lower would expose the 0.6600 area.

AUDUSD Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, price has formed minor support near 0.6725. If price revisits this zone, buyers may step in with tight risk below support.

Conversely, sellers will watch for a decisive break lower. That move would likely shift focus back toward the 0.6665 region.

The red lines on this chart mark today’s average daily range.

Timeframe	Key Level	Market View
Daily	0.6665 support	Price bounced and extended gains after geopolitical headlines.
4-hour	0.6665 / 0.6600	Buyers favor dips; sellers need a break toward 0.6600.
1-hour	0.6725 / 0.6665	Short-term buyers defend 0.6725; breakdown shifts focus lower.