Bearish sentiment prevailed for the AUD/USD pair on Thursday. The Australian dollar fell after the April labor market data. This is not surprising, given that all key components of the release were in the "red zone." The report was openly weak, disappointing not only in the "headline" figures but also in its structural elements. Traders had expected relatively neutral data; however, the actual numbers indicate a gradual cooling of the Australian labor market.
The main blow was dealt to the employment figure. Instead of the forecasted increase of 16,000 jobs, the Australian economy lost nearly 20,000 jobs (18,600). This indicator fell into negative territory for the first time since November of last year. Moreover, the deterioration occurred "across the board"—the number of full-time employed dropped by 10,700, while part-time employment decreased by 7,900.
Unemployment unexpectedly rose to 4.5% in April, the highest level since September 2025. Most analysts had expected the figure to remain at the March level of 4.3%. In absolute terms, the number of unemployed people in Australia increased by 33,000 people over the month.
The report's structure also signals negative trends. Specifically, representatives from the Australian Bureau of Statistics (ABS) noted that the worsening situation was largely due to a decline in female employment. The ABS emphasized that this indicator showed negative dynamics for the first time since August 2025, thus breaking a prolonged upward trend. The decrease was noted in both full-time and part-time segments.
Another alarming signal is the rise in youth unemployment. Although this component typically experiences higher volatility due to significant seasonal influences, the April result cannot be dismissed as mere statistical noise. Youth unemployment increased by 0.9 percentage points to 11.1%. This is notably one of the signs of the "first wave" of economic cooling: when consumer demand decreases, businesses tend to cut positions with low entry thresholds first (retail, service sector), where traditionally a significant number of students and young professionals are employed. In other words, double-digit youth unemployment indicates that employers have begun reducing hiring, primarily among younger employees, amid a deteriorating labor market.
A peculiar "cherry on top" in this context is the decrease in the Participation Rate. The labor force participation rate fell from 66.8% to 66.7%. At first glance, this change appears minor; however, in conjunction with rising unemployment, it indicates weakening labor demand. Additionally, the decline in this indicator (which has fallen for the second consecutive month) may suggest that some individuals who have lost their jobs or faced difficulties in the job market are ending their active job searches and temporarily exiting the labor force.
While some components of the published report appear stable (for example, the number of hours worked increased by 0.8%), the market ignored this factor, as the overall "vector" of the release clearly points to a cooling of the Australian labor market. Moreover, the increase in this indicator (hours worked) is primarily associated with seasonal effects and a redistribution of workload among already employed workers, rather than an expansion of hiring.
In other words, the April "Australian Non-Farms" have unpleasantly surprised AUD/USD traders. The report indicated that businesses are showing clear hesitancy regarding hiring amid high uncertainty and declining consumer confidence. The only relatively positive aspect of the release was the increase in hours worked; however, this merely confirms that companies prefer to increase the workload of their current personnel rather than hire new employees.
Overall, the published data significantly reduces the likelihood of further interest rate hikes from the Reserve Bank of Australia. The baseline scenario now suggests the rate will be maintained at its current level, which appears to be the cycle peak.
All this points to the prioritization of short positions in the AUD/USD pair. This is also signaled by the technical side of the issue. On the four-hour chart, the Aussie is situated between the middle and lower lines of the Bollinger Bands and below all lines of the Ichimoku indicator, which has formed a bearish "Parade of Lines" signal. On the daily chart, the pair is located between the middle and lower lines of the Bollinger Bands, below the Tenkan-sen and Kijun-sen lines, but above the Kumo cloud. It is prudent to consider corrective spikes as opportunities to open short positions. The target for the downward movement is the support level at 0.7100, which corresponds to the lower Bollinger Bands line on the D1 timeframe.
