- AUD/USD wavers in a choppy range above 0.7700 after rising the most in two months.
- Commodity-linked currencies benefited the most from the US dollar weakness, WTI gains.
- Wall Street closed mixed after the initial run-up, US Treasury yields grew 1.1 bps.
- Powell repeated old tunes, Aussie employment figures expected to print mixed figures in March.
AUD/USD picks up bids around 0.7730 while keeping the recent 20-pip range amid the early Thursday morning in Asia. The pair jumped to the most since late February to test the highest levels last seen on March 23 the previous day amid US dollar weakness, commodity strength and upbeat data at home.
It’s a dull day but not for the Aussie bulls…
Antipodeans were the smartest cookies in the jar that outshined the rest of the currency basket amid an inactive day. There were no major positives that could have boosted the market sentiment, as well as AUD/USD, except for Fed Chair Powell’s old cautious optimism. Fed’s Powell repeated “strong economy, upbeat employment” words while turning down policy change until 2022.
At home, strong Australian Westpac Consumer Confidence, praised by Aussie Treasury, as well as Chinese Premier Li Keqiang’s push for Sino-American talks should have helped AUD/USD bulls. Further, the removal of virus-led activity restrictions from Queensland is also a distant positive for the quote.
Additionally, WTI’s run-up to a one-month high, backed by strong inventory depletion and hopes of economic recovery, also offered a ray of hope to AUD/USD bulls.
Amid these plays, Wall Street benchmarks initially refreshed record top before closing mixed whereas the US 10-year Treasury yields gains 1.1 basis points (bps) by the end of Wednesday’s North American trading session.
Moving on, AUD/USD traders should pay attention to the March month’s employment figures with headlines Employment Change likely easing to 35K from 88.7K whereas Unemployment Rate may step back from 5.8% to 5.7%. Although no major surprises are expected, a blow to the downside may shake RBA’s employment beliefs and could reverse the previous day’s gains by the pair.
Read: Australian Employment Preview: Upbeat jobs data to provide tailwind to the aussie
Technical analysis
Not only a daily closing beyond a downward sloping trend line from February 25 but a clear breakout of 50-day SMA, respectively around 0.7640 and 0.7720, directs AUD/USD further north towards the 0.7800 threshold and then to the previous month’s high near 0.7850.
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