FX Daily Strategy: Asia, Jul 23

Widely expected to stay positive, the headline employment is likely confirming the choppy labor market. We expect unemployment and participation rate to fluctuate within 0.1% as the overall labor market is healthy. It will be great to see more full time than part time growth, yet very likely the market will read more into the headline figure. The RBA will like to see a steady employment change, not too hot, not too cold while they are bracing for the second round of energy push inflation. To avoid killing the economy, they are carefully watching their steps in next hike after consecutive ones done in the first half of 2026.

On the chart, the pair is still pressuring the upside but gains kept in check at the .7000/20 congestion and Fibonacci level. Bullish structure from the .6865 low suggest scope for further to retrace the May/June losses. Higher will see room to .7050 congestion then the strong resistance at the .7080/.7100 area. Meanwhile, support remains at the .6950 congestion. Break here will fade the upside pressure and open up room for deeper pullback to the .6912/00 area. Below this will expose .6865 June low to retest and threaten further losses.

The break of the 3-week triangle pattern has seen follow-through the 162.84 high of 1 July high to reach fresh high at 163.24. Pressure remains on upside and higher will see room to target the December 1986 high at 164.00. Higher still, will see scope to 164.95 November 1986 high and 195.00 figure. Meanwhile, support is raised to the 162.50/160.00 congestion area which should underpin. Would take break here to ease the upside pressure and see room for consolidation to support at the 161.28/00 area. Below this will open up room for pullback to retest the 160.48 low and 160.00 figure.