- AUD / USD gains some positive traction on Friday amid a modest USD pullback.
- Optimism about a stronger US economic recovery could help limit the USD’s slide.
- The reluctance ahead of the US NFP report could further limit the pair’s rise.
The pair AUD/USD has moved higher at the start of the European session on Friday and has reached new daily highs, around the region of 0.7620 in the last hour.
Following the previous day’s pullback of around 60 pips, from the 0.7645-50 area, the pair has managed to regain some positive traction on the last trading day of the week. The Australian dollar has found some support after the Reserve Bank of Australia (RBA), in its monetary policy statement, sounded optimistic about the economic outlook.
The positive factor, to some extent, has helped counter the RBA’s moderate policy stance, reaffirming that it was committed to maintaining a highly supportive policy until inflation reaches its target range of 2-3%. The statement showed that even in an optimistic scenario, inflation would remain below 2% until mid-2023, the end of the forecast period.
On the other hand, the US dollar has been consolidating its recent strong gains to the highest level in more than two months. This has been seen as another factor that has provided a modest rally to the AUD / USD pair amid the underlying bullish sentiment in financial markets, which tends to benefit the perceived riskier Australian dollar.
Meanwhile, positive macroeconomic data, coupled with prospects for massive US fiscal spending, have fueled optimism about a stronger economic recovery. This could continue to extend some support to the USD and limit further gains for the AUD / USD pair. Investors could also refrain from opening aggressive positions ahead of the monthly US NFP jobs report.
The report of the NFP show US economy added 50,000 new jobs in January, after a sharp drop in the last month of 2020. Meanwhile, the unemployment rate is expected to remain stable at 6.7%. Apart from this, US bond yields could influence USD price dynamics and generate some trading opportunities around AUD / USD.
AUD / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
