- The US dollar maintains heavy losses after the NFP.
- AUD / USD is reversing sharply and turning positive for the week.
The AUD/USD It continued to rise during the US session and hit a new daily high at 0.7740. After making a strong 70 pip bounce from the lows, it remains near the top of the range and clears most of Thursday’s losses.
The AUD / USD rally was triggered by a fall in the US dollar across the board, following the release of the US employment report. Payrolls rose 559,000 in May, disappointing expectations and against the odds of a positive surprise to emerge after employment indicators released Thursday.
“The May employment report confirmed that the biggest challenge to the job market recovery right now is work itself. Hiring recovered in May and employers added 559,000 new jobs, but like the April report, it disappointed expectations, “Wells Fargo analysts explained. They point out that with jobs still 7.6 million short of pre-pandemic highs, further substantial progress in the job market still appears to be a long way off in the eyes of the Federal Reserve. “
Improving risk sentiment and falling US bond yields supported AUD / USD. With today’s rally, the pair erased weekly losses and rallied above the key support area of 0.7700. The next resistance to the upside emerges at 0.7750 / 60 (downtrend line); a break to the upside should strengthen the outlook for the Australian.