AUD/USD rises amid US yields drop, eyes on Australia’s employment data

• AUD/USD climbs 0.55%, finding support in lower US Treasury yields and increased risk appetite, trading near 0.6490.
• Fed’s Goolsbee hints at inflation path aligning with 2% target, underlining the current restrictive policy stance.
• Australian job market in focus, with expectations of 30K new jobs and a slight uptick in unemployment to 4%.

The Aussie Dollar recovered some ground on Wednesday and climbed 0.55% against the US Dollar, courtesy of falling US Treasury bond yields and risk appetite improvement. The AUD/USD consolidated at around the 0.6450-0.6490s area, and as Thursday’s session began, the pair exchanged hands at 0.6490.

AUD/USD jumps off yearly lows but is not out of the woods with jobs data pending

The economic docket was light following Tuesday’s hot inflation report from the United States. Chicago Fed President Austan Goolsbee crossed the wires and stated higher inflation for a few months would be consistent with a path back to the Fed’s 2% goal. He added the current policy stance is restrictive.

Fed officials adopted a more neutral stance after the first monetary policy decision of the year. Powell’s shrugging off expectations for a rate cut in March and February’s data indicates the economy is still robust. However, before the March and May meeting, there’s a good tranche of data to digest, before Powell and Co. could guide the markets.

In the meantime, the swaps markets see the Fed would cut rates 110 basis points from the current level at the 5.25%-5.50% range.

Aside from this, the Australian economic docket will feature the release of labor market data. Estimates suggest the Aussie’s economy added 30K jobs to the workforce, while the unemployment rate is foreseen at 4%, up from December’s 3.9%.

AUD/USD Price Analysis: Technical outlook

The AUD/USD is downward biased despite posting solid gains on Wednesday. Buyers need to reclaim the 0.6500 if they would like to reclaim the 100-day moving average (DMA) at 0.6537. A breach of the latter will expose the 200-DMA at 0.6565, ahead of 0.6600. On the other hand, the first support is seen at 0.6442, the February 13 low, followed by the 0.6400 mark.