AUD/USD drops on Australia unemployment surge, RBA rate cut imminent

AUD/USD declined sharply following Australia's unexpected jump in unemployment data, which has virtually guaranteed an RBA rate cut at the August meeting. The unemployment rate surge caught markets off-guard, intensifying pressure on the Reserve Bank of Australia to ease monetary policy despite holding steady at the previous meeting when cuts were widely anticipated. The Australian dollar weakened against its major counterparts as traders rapidly repriced rate expectations, with money markets now fully pricing in a 25 basis point cut next month. The RBA's previous hesitation to cut rates despite market expectations adds uncertainty to the current scenario, though deteriorating labor market conditions leave little room for further delays. Technical analysis shows AUD/USD testing support at 0.6650, with the next major level at 0.6620. A break below current support could accelerate losses toward 0.6600, while any RBA surprises could provide temporary relief rallies.