- AUD / USD was unable to preserve its bullish momentum after closing higher on Thursday.
- The US dollar index continues to rise during the European session.
- Nonfarm payrolls in the US are expected to increase by 870,000 in July.
The pair AUD/USD posted small daily gains on Thursday, but lost traction on Friday. At time of writing, the pair was down 0.21% on the day at 0.7389.
DXY climbs even higher, eyeing NFP numbers
Market optimism helped the AUD find demand on Thursday. However, the renewed strength of the USD forced the pair to reverse its direction. Ahead of the highly anticipated July labor market report from the US Bureau of Labor Statistics, the US dollar index is trading at its highest level in more than a week at 92.42, rising 0.18% on the day.
Non-Farm Payrolls (NFP) in the US are expected to increase by 870,000 in July. However, the negative impact of ADP’s disappointing Employment Change reading was short-lived earlier in the week and investors weighed in on the possibility that the Fed would cut back on asset purchases before the end of the year. Unless the NFP print is a major disappointment, the dollar could continue to outperform its rivals in the second half of the day.
Meanwhile, the Governor of the Reserve Bank of Australia, Philip Lowe, adopted an optimistic tone regarding the economic outlook, but it did not help the AUD to gain strength. Lowe noted that the economy has recovered faster than expected, adding that they expect wage inflation and core inflation to remain subdued.
Technical levels
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