AUD / USD recovers rapidly from month-long lows, picks up 0.7700 level

• The USD faded from the post-NFP peak and helped the AUD / USD rebound from the month-long lows.
• A strong rally in equity markets triggered some profit-taking around the safe-haven dollar.

The pair AUD/USD It quickly reversed the post-NFP rally to month-long highs and was last seen trading modest losses, just above 0.7700.

The pair witnessed some follow-up selling for the third straight session and added to its intraday losses in reaction to the upbeat monthly US jobs report. NFP figures showed the US economy added 379,000 jobs. in February and the previous month’s reading was also revised up to 166,000 from 49,000 previously reported.

Added to this, the unemployment rate dropped to 6.2% from 6.3%. The impressive labor market report momentarily pushed the yield on the 10-year US government bond above 1.60%, again closer to the highs of more than a year. This was seen as another factor that provided a good boost to the already stronger dollar.

However, US bond yields were not tracked. This, coupled with a sharp rise in US equity futures, limited gains for the safe-haven dollar and extended some support to the perceived riskier Australian dollar. The AUD / USD pair rallied nearly 80 pips from daily lows, with the bulls targeting a move above 0.7700.

With important data out of the way, US bond yields will continue to play a key role in influencing USD price dynamics amid progress on a massive US tax spending plan. From this, the broader market risk sentiment could also produce some short-term opportunities around the AUD / USD pair.

Technical levels