AUD/USD Outlook: Bears await sustained break below 0.6700 mark, US macro data in focus

The AUD/USD pair struggles to capitalize on the previous day's modest rebound from the 0.6700 mark and seesaws between tepid gains/minor losses through the Asian session on Thursday. A modest recovery in the risk sentiment - as depicted by signs of stability in the equity markets - continues to offer some support to the risk-sensitive aussie. That said, mixed Australian employment data fails to impress bullish traders, which, along with the emergence of fresh US dollar buying, acts as a headwind for the major.

The Australian Bureau of Statistics reported that the unemployment rate ticked up to 3.5% in August from a 48-year low in the previous month. Furthermore, the number of employed people rose less-than-expected by 33.5K during the reported month. This, however, was largely offset by a sharp rise in full-time employment, which climbed a solid 58.8K after a sharp fall of 86.9K the month before. The data points to a resilient labour market and suggests the Reserve Bank of Australia (RBA) will keep raising interest rates.

The USD, on the other hand, is back in demand and remains well supported by expectations that the Fed will tighten its monetary policy at a faster pace to tame inflation. In fact, the markets started pricing in the possibility of a full 1% rate hike at the next FOMC meeting on September 20-21 following the release of a stronger US CPI report on Tuesday. This remains supportive of elevated US Treasury bond yields, which should continue to act as a tailwind for the greenback ahead of Thursday's important US macro releases.

The US economic docket highlights the release of the monthly Retail Sales figures, the usual Weekly Initial Jobless Claims and Regional Manufacturing Indices. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and allow traders to grab short-term opportunities around the AUD/USD pair. The focus will then turn to the Chinese data dump during the Asian session on Friday.

Technical levels to watch

From a technical perspective, weakness below the 0.6700 mark is likely to find some support near the YTD low, around the 0.6680 region touched in July. Some follow-through selling will be seen as a fresh trigger for bearish traders and set the stage for further losses. The AUD/USD pair might then turn vulnerable to accelerate the slide towards the 0.6600 mark en route to the next relevant support near the 0.6550-0.6545 area.

On the flip side, momentum back above the 0.6800 round figure might confront stiff resistance near the 0.6850-0.6860 region. This is followed by the resistance just ahead of the 0.6900 mark, which if cleared decisively will negate the near-term negative bias. The AUD/USD pair might then climb towards the 100-day SMA barrier, currently around mid-0.6900s before eventually aiming to reclaim the 0.7000 psychological mark.