AUD/USD clings to gains near 0.7830-35 region, over two-week tops

The AUD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range around the 0.7830-35 region, or over two-week tops set earlier this Thursday.

A combination of supporting factors assisted the pair to gain some follow-through traction on Thursday and built on the overnight post-FOMC strong positive move of over 100 pips from the 0.7700 mark. Despite predicting a V-shaped economic recovery in the US, the Fed maintained its ultra-dovish tone and reiterated that it was in no rush to raise interest rates at least through 2023. The announcement triggered a massive US dollar selloff and prompted some aggressive short-covering move around the AUD/USD pair.

The aussie dollar got an additional boost from Thursday’s upbeat Australian employment details, which showed that the number of employed people rose by 88.7K in February. The reading surpassed even the most optimistic estimates and was accompanied by a sharp fall in the unemployment rate to a fresh post-pandemic low level of 5.8%. Apart from this, the prevalent bullish sentiment in the financial markets further benefitted the perceived riskier Australian dollar and contributed to the AUD/USD pair's move back closer to monthly tops.

It, however, remains to be seen if bulls are able to capitalize on the momentum or the 0.7835-40 supply zone, or monthly swing highs continue to cap the upside for the AUD/USD pair. Market participants now look forward to the US economic docket, featuring the releases of the Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims for a fresh impetus later during the early North American session. This, along with the broader market risk sentiment, should assist traders to grab some short-term opportunities.

Technical levels to watch