AUD/USD pares intraday gains to weekly high, up little around 0.7230 region
|- The upbeat Australian jobs report, a positive risk tone pushed AUD/USD to a weekly high on Thursday.
- A fresh leg up in the US bond yields underpinned the USD and capped any further upside for the pair.
- Investors now look forward to the US economic releases for some short-term trading opportunities.
The AUD/USD pair maintained its bid tone near the 0.7230 region heading into the European session, albeit has retreated a few pips from the weekly high touched earlier this Thursday.
A combination of supporting factors assisted the AUD/USD pair to build on the overnight positive move and gained some follow-through traction for the second successive day. The Australian dollar drew support from stronger domestic employment details, which showed that the jobless rate dropped to 4.2% in December from 4.6% in the previous month. Adding to this, the number of employed people surpassed expectations and rose 64.8K during the reported month. This, along with a recovery in the global risk sentiment, benefitted the perceived riskier aussie.
Bulls, however, struggled to capitalize on the move or find acceptance above mid-0.7200s amid the emergence of some US dollar dip-buying. Growing market acceptance that the Fed would begin raising interest rates in March to contain stubbornly high inflation continued underpinning the greenback. Apart from this, a fresh leg up in the US Treasury bond yields acted as a tailwind for the buck and kept a lid on any meaningful upside for the AUD/USD pair. This, in turn, warrants some caution before positioning aggressively for any further appreciating move.
Market participants now loo forward to the US economic docket – featuring the releases of Philly Fed Manufacturing Index, Weekly Initial Jobless Claims and Existing Home Sales data. This, along with the US bond yields, will influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities around the AUD/USD pair. That said, the momentum is likely to be limited as investors might refrain from placing fresh directional bets ahead of the crucial FOMC policy meeting on January 25-26.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.