AUD/USD pauses run-up to 0.7350 on mixed Australia employment details

• AUD/USD consolidates intraday gains, steps back from daily high on mixed Aussie data.
• Australia Employment Change dropped more than expected, Unemployment Rate improved in August.
• Market sentiment dwindles over Aussie security pact with US, UK and pre-US Retail Sales caution.

AUD/USD seesaws around intraday high, recently dropped around 10-pips to 0.7340 following Australia jobs report release during early Thursday. In addition to the mixed data, recent challenges to the market sentiment also probe the pair buyers.

That said, Australia Employment Change declines more than -70.0K forecast to -146.3K but the Unemployment Change eased below 4.9% market consensus to 4.5%, versus 4.6% prior. Further, the Participation Rate drops below 66.0% previous readouts and 65.7% expected to 65.2% during August.

Read: Breaking: Aussie Unemployment Rate improves, AUD holds steady

Earlier in the day, Australia Consumer Inflation Expectations for September grew beyond 3.3% figures to 4.4%.

Given the mixed data, the early week comments from Reserve Bank of Australia (RBA) Governor Philip Lowe seems to regain importance and challenge the bulls even as the recently easing Fed tapering concerns favored AUD/USD of late. RBA’s Lowe said, “(Covid) Outbreak is a significant setback, an added element of uncertainty,” while speaking on the topic “Delta, the Economy and Monetary Policy” at an online event hosted by Anika Foundation.

It’s worth noting that Morgan Stanley hints at a short-squeeze in the AUD/USD positions but remain cautious for the pair’s further upside due to their bullish bias over the US dollar.

That said, the market sentiment recently soured, trimming early Asian gains of S&P 500 Futures and weighing on the US Treasury yields too. Given the AUD/USD pair’s risk barometer status, challenges to the mood weigh on the Aussie pair prices.

Australia’s trilateral security pact with the UK and the US, availing nuclear-powered submarines, signals a further worsening of relations with China. Following the news, New Zealand also reiterated their ban over the nuclear power's entry into their waters. Furthermore, a one-week high of the local infections to 1,868, versus 1,698 the previous day also challenge the AUD/USD buyers.

Moving on, AUD/USD traders will keep their eyes on the risk catalysts ahead of the US Retail Sales details for August, expected -0.1% versus -1.0% prior, for fresh impulse. It should be noted, however, that the pre-Fed anxiety may keep the quote cautiously optimistic.

Read: US August Retail Sales Preview: Can gold turn bullish on a weak print?

Technical analysis

AUD/USD bounced off August 31 lows the previous day, taking a U-turn from 20-DMA around 0.7330 by the press time. The rebound currently battles a downward sloping trend line from September 07. In addition to the stated trend line hurdle, steady RSI and fears of downbeat employment figures also challenge the pair bulls. Hence, a clear upside break of the stated resistance line, near 0.7335, followed by the 50-DMA level of 0.7350, becomes necessary for the pair to extend the latest advances.