For the second consecutive week, the Australian dollar has been assaulting the 70 level against the US dollar. The target of 0.7000 is a crucial and psychologically significant resistance level, the overcoming of which is usually accompanied by a prolonged, sometimes multi-month siege. Therefore, it is not surprising that buyers of AUD/USD have not managed to achieve a blitzkrieg and capture this strategically important outpost without a fight. The 0.7000 level is a strong multi-year technical resistance zone where many market participants prefer to close long positions.

Nonetheless, the pair has demonstrated an upward dynamic for the fourth consecutive week, despite the escalation of the Middle Eastern conflict, the rise in oil prices, and overall geopolitical tension.

The reason is that the Australian dollar receives substantial support from internal factors. Recent data on inflation and the labor market (which we will discuss in more detail) have significantly reduced the likelihood of easing monetary policy in the foreseeable future. The Reserve Bank of Australia (RBA) is taking a wait-and-see approach and does not rule out the possibility of raising interest rates if inflation begins to accelerate on a sustainable basis. The widening expected interest rate differential between the RBA and the Federal Reserve is working in favor of the Aussie.

Additionally, the commodity market provides extra support to AUD/USD buyers, amid rising prices for key Australian export goods. Iron ore, copper, and several other industrial metals are showing resilience due to sustained demand from China. For instance, iron production (for which iron ore is necessary) in China is operating at the upper limit of seasonal norms. This is traditionally a positive factor for the Australian economy.

The labor market data released today further supported the Aussie, allowing AUD/USD buyers to test the 0.7000 price barrier once again. Despite certain "flaws," the release was strong enough.

In June, the number of employed people in Australia increased by 76,000. This result was nearly three times the forecast, as most analysts expected only a gain of 20,000.

The labor force participation rate rose to 67.0%, one of the highest levels in the history of statistical observation, only slightly below the historical high of 67.1%. However, the unemployment rate remained at 4.4% (this component of the report coincided with experts' expectations).

At first glance, the combination of such a strong increase in employment and stable unemployment might seem contradictory. However, this "anomaly" can be explained by the fact that, alongside the creation of new jobs, the number of people entering the labor market has significantly increased, as many Australians began actively searching for work. As a result, the country's economy managed to "absorb" a significant influx of new workers without reducing the unemployment rate.

In other words, the increase in labor supply nearly fully offset the rise in demand for workers. Such dynamics are characteristic of a stable labor market.

However, the key message from the "Australian Non-Farms" is not the "stagnation" of the unemployment rate, but rather the scale of job creation. Just a few months ago, market participants were expecting a gradual cooling of the labor market amid slowing business activity. However, today's data indicate that the demand for labor remains quite robust.

For the RBA, this dynamic is considered "hawkish." The labor shortage creates upward pressure on wages, which in turn complicates efforts to slow inflation, especially in the service sector, where labor costs account for a significant portion of expenses.

Nevertheless, despite the evidently positive picture, the report contains certain pitfalls. According to representatives of the ABS (Australian Bureau of Statistics), the strong job growth is partially explained by seasonal and calendar factors: some workers who were supposed to start in May actually began their employment only in June. This means that a portion of the June spike is technical in nature, and therefore may not be repeated next month.

Still, AUD/USD traders interpreted today's release unequivocally in favor of the Australian dollar. Although part of the June job gain could have been influenced by statistical factors, the overall signal from the report was strong: the labor market remains resilient, and demand for labor is high. This increases the likelihood that the RBA will not rush to ease monetary policy.

However, the further dynamics of AUD/USD will depend not only on internal data from Australia but also on global risk appetite, the Fed's policies, and the dynamics of the Chinese economy. Given the ongoing geopolitical tensions, the external backdrop may limit the potential for strengthening the Australian currency—even in light of impressive "Australian Non-Farm" numbers.

Currently, AUD/USD buyers are trying to establish themselves above the key resistance level of 0.7000 (the middle line of the Bollinger Bands, which coincides with the Tenkan-sen line on the H4 chart), testing the next price barrier at 0.7020 (the upper line of the Bollinger Bands on the same timeframe). A firm breakout of this zone would open the path for further upward movement toward the target of 0.7070 (the lower boundary of the Kumo cloud on the daily chart).

For opening long positions, it is advisable to wait for confirmation of one of two scenarios. Either AUD/USD buyers will successfully overcome the resistance of 0.7020, after which the path to 0.7070 will open. Or another attempt to storm the 70 level will end in failure, after which the pair will return to the 69 level. In that case, corrective pullbacks could again be seen as an opportunity to open longs with targets of 0.7000 and 0.7020.