AUD/USD: Holds Fed-led rally around 0.7800 with eyes on Australia employment

• AUD/USD stays firm around two-week top after heavy run-up in the last few hours.
• Risks cheer Fed’s sustained favor for easy money policies, no immediate rate hike clues.
• Geopolitical tensions could keep the bulls chained if Aussie employment disappoints.
• RBA Bulletin and Kent’s speech will also entertain the traders.

AUD/USD extends post-Fed run-up to the early Thursday morning in Asia, currently around 0.7800, as traders stay hopeful over the Aussie employment data, scheduled for publishing at 00:30 AM GMT. However, challenges to the risks stay on the board to keep a tab on the quote’s uptrend. Also, the US treasury yields may as well consolidate while re-reading the Fed dot-plot and the latest monetary policy decision.

Fed fuelled the rally, Aussie jobs eyed…

With Powell & Co. falling short of flashing the rate hike signals, the US dollar marked a notable drop afterward. This helped the commodities and the Antipodeans to cheer the greenback’s fall ahead of the key data from New Zealand and Australia up for publishing soon.

It should, however, be noted that a closed reading suggests four policymakers see a lift-off in the fed funds rate from zero in 2022, versus only one policymaker in December's publication. Additionally, the number of policymakers who see a lift-off in the fed funds rate from zero in 2023 rose to seven from five in December. This shows a bit bullish bias than none and may help the greenback to nurse the latest losses.

Elsewhere, Sino-American tension joins the US tussles with North Korea and Iran. Further, the UK’s readiness to go beyond the deal to tame Tehran’s alleged nuclear piling also heavy the risks. It should additionally be noted that the raw over AstraZeneca vaccine in the European Union (EU) is yet to be solved totally and hence challenge the risks.

Against this backdrop, Wall Street benchmarks managed to end the volatile Wednesday on a positive side while the US 10-year Treasury yields also stay firm around 1.646% following its rally to the highest since February 2020.

Looking forward, Australia’s February employment report is likely to show welcome prints with slower growth in the jobs report. Ahead of the release, FXStreet’s Valeria Bednarik cited RBA’s latest verdict saying, “wage growth would need to be sustainably above 3% before considering any rise in interest rates,” to hint at the need for a strong figure to propel the AUD/USD post-release.

Read: Australian Employment Preview: Moving into the right direction but at a slow pace

Further, the Reserve Bank of Australia’s (RBA) monthly Bulletin and speech by the Assistant Governor Christopher Kent will also entertain the AUD/USD traders as that will be observed for the central bank’s reactions to the data.

Technical analysis

A sustained break of a two-week-old falling trend line and 21-day SMA, respectively around 0.7790 and 0.7780, keeps AUD/USD buyers hopeful to refresh the monthly high above 0.7838 currently.