Bank of America sees AUD/USD uptrend continuing on weak US jobs data

Bank of America forecasts the AUD/USD uptrend to continue, contingent on upcoming U.S. payrolls data falling below consensus expectations, specifically projecting 60,000 jobs added versus the market's over 100,000 estimate and a potential unemployment rate rise to 4.2%. This outcome would reinforce a weaker U.S. dollar narrative for H2 2025, with AUD/USD exhibiting the clearest trend continuation signal among G10 pairs, supported by technical indicators. The primary risk to this bullish view is unexpectedly strong U.S. economic data combined with hawkish Federal Reserve guidance.

Analysis

Bank of America (BofA) projects a continued uptrend for the AUD/USD currency pair, contingent on the upcoming U.S. payrolls report undershooting market expectations. BofA's forecast is notably non-consensus, predicting job growth of only 60,000 versus the market consensus of over 100,000, and an increase in the unemployment rate to 4.2%. According to the bank, such a weak data print would reinforce the narrative of a decelerating U.S. economy, likely driving the U.S. dollar lower in the second half of 2025. Among G10 currencies, BofA identifies AUD/USD as having the most distinct trend continuation signal for a weaker dollar. This view is supported by market and technical indicators, including a recent rise in residual call skew for the Australian dollar and the spot price remaining above its 50-day simple moving average, which suggests the uptrend is not overextended. The primary risk to this bullish AUD/USD outlook is a combination of unexpectedly strong U.S. economic data and hawkish forward guidance from the Federal Reserve, which could catalyze a significant U.S. dollar rally.

Key Decisions for Investors

• Investors holding a bearish view on the U.S. economy may consider long AUD/USD positions, as the pair is identified by Bank of America as having the clearest trend continuation signal against a weaker dollar.
• The upcoming U.S. payrolls report is a critical catalyst; a print near BofA's 60,000 forecast would validate the bullish thesis, whereas a figure exceeding the 100,000 consensus would act as a strong counter-signal.
• Positions should be managed with an awareness of the key risk: a hawkish Federal Reserve response to unexpectedly strong U.S. economic data could trigger a sharp reversal and a U.S. dollar rally.
• Traders should monitor the AUD/USD spot price relative to its 50-day simple moving average, as a sustained position above this level is a key technical support for the bullish thesis.