AUD/USD struggles around yearly top above 0.7300 on Russia-Ukraine crisis, US NFP in focus

With the risk-off mood in full steam, AUD/USD sellers return on early Friday. That said, the Aussie pair prints 0.14% intraday losses around 0.7310, after refreshing the daily lows to 0.7299, as it drops for the first time in three days. It’s worth observing that the risk-barometer pair refreshed yearly top to 0.7348 the previous day.

Russia’s shelling of Europe’s largest nuclear plant, in Ukraine, triggered the latest risk-aversion wave as it confirmed the market’s doubt over the Russia-Ukraine peace talks that agreed on the safe passage of Kyiv’s civilians the previous day. The attack on the Ukrainian power plant raised concerns over the higher radiation levels and renewed Chernobyl fears before US Senator Marco Rubio quote an anonymous second Ukrainian diplomat to tame the woes. 

Senator Rubio tweeted, “Second Ukraine official just now says reactor was “hit” & is inactive with fuel inside but that its the admin building which is on fire.” “He had received no information about elevated radiation levels, says meltdown unlikely but leak is possible,” the policymaker added.

Elsewhere, escalating concerns over the Fed’s 0.50 rate-hike in March also weighed on the riskier assets, including the AUD/USD.

Fed Chair Jerome Powell reiterated his support for a 0.25% rate hike, actually showing readiness for a 0.50% rate-lift in the March meeting, during the second round testimony the previous day. While portraying the market implications from Powell’s comments, CME’s FedWatch Tool marks around 89% odds favoring the same rate-lift in the next month’s Fed meeting.

It should be noted that US ISM Services PMI eased for the third consecutive month in its latest release but the second-tier job data and Factory Orders came in positive on Thursday. At home, Australia’s Trade Balance was upbeat but Building Permits slumped in January.

While portraying the mood, S&P 500 Futures drop around 1.0% on a day whereas the US 10-year Treasury yields mark near six pips of a downside to 1.78% by the press time.

Moving on, headlines concerning Ukraine and Russia will be crucial for AUD/USD and so do the US jobs report for February.

Read: US Nonfarm Payrolls February Preview:  Fed policy runs through Kyiv

Technical analysis

AUD/USD bulls are on the way to the mid-November 2021 peak surrounding 0.7370 unless posting a daily close below the 100-DMA level of 0.7235.