- AUD/USD advanced during the first part of Thursday, although it lacked follow-through.
- A pullback in US bond yields and a sentiment of appetite for the AUD is benefiting the AUD and offering some support to the pair.
- A softer Austalia jobs report turns out to be a key factor acting as a headwind for the pair.
The pair AUD/USD returns your initial winnings and drops to fresh daily lows around the 0.7440 level midway through the European session on Thursday.
The pair built on the previous day’s bounce from below the 0.7400 level, at a three-week low, and gained some positive traction during the early part of Thursday. The US dollar pulled back further from its highest level since May 2020, which was seen as a key factor offering some support to the AUD/USD pair.
The US consumer inflation figures released on Tuesday were not as bad as the markets feared and forced US Treasury yields to halt their recent sharp move higher at most several years. This, coupled with a positive tone around equity markets, weighed on the safe-haven USD and benefited the AUD higher perceived risk.
This, to a greater extent, offset softer details from Australia’s jobs report, which showed the jobless rate holding steady at 4.0% in March versus expectations for a modest decline to 3.9%. Furthermore, the number of employed increased by 17,900, significantly below the 77,400 in February and below the consensus estimate of 40,000.
Nevertheless, intraday rally lacked bullish conviction and AUD/USD remains stuck within previous day’s trading range. Expectations that the Fed would tighten monetary policy at a faster pace to curb rising inflation helped limit the dollar’s deeper losses and capped the pair, warranting some caution for aggressive bullish investors.
Market participants now await the US economic calendar, which includes monthly retail sales data, weekly initial jobless claims and the preliminary Michigan Consumer Sentiment Index. This coupled with US bond yields will influence the USD dynamic and provide some momentum to the AUD/USD pair during the American session.
AUD/USD technical levels
Source: Fx Street
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