AUD / USD recovers from yearly lows, jumps to 0.7500 after NFP report

• AUD / USD saw a positive rally from multi-month lows following the release of the NFP report.
• An unexpected spike in the unemployment rate disappointed investors and weighed on the USD.
• The continued decline in US bond yields further undermined the dollar and continued to act as supportive.

The pair AUD/USD it updated daily highs during the early days of the American session, and the bulls are now expecting some follow-up strength above the key psychological 0.7500 level.

The pair witnessed a dramatic intraday reversal from nearly seven-month lows and rallied more than 50 pips amid some profit-taking in US dollars following the release of a monthly mixed US employment report. Figures from the NFP report beat even the most optimistic estimates and showed that the economy added 850,000 new jobs in June.

In addition to this, the prior month’s reading was also revised up to 583,000 from 559,000 previously reported. Despite a positive sign that the chronic labor shortage could finally be ending, an unexpected rise in the unemployment rate to 5.9% from 5.8% in May appeared to have prompted investors to lighten their bullish bets on the USD.

Meanwhile, a rebound in the unemployment rate appeared to have disappointed fixed income traders. This was evident by a sharp drop in US Treasury yields, which further undermined the dollar. Apart from this, risk appetite further benefited the perceived riskier Aussie and triggered a short hedging move in the AUD / USD pair.

With the latest rally, the pair, for now, has broken four consecutive days of the losing streak and trimmed a portion of its weekly losses. However, the AUD / USD pair is still on its way to end the week lower and still looks vulnerable to prolong its recent downtrend. Therefore, any subsequent promotion could be seen as a sales opportunity.

Technical levels