AUD/USD trades with modest losses below 0.7300 mark, lacks follow-through

• A modest USD short-covering move exerted some pressure on AUD/USD.
• Bulls largely shrugged off mostly upbeat Australian employment details.
• Dovish Fed expectations might cap the USD and help limit the downside.

The AUD/USD pair traded with a negative bias through the Asian session and was last seen hovering near the lower end of its daily range, just below the 0.7300 mark.

Having struggled to capitalize on the previous day’s bounce of around 60 pips. the pair met with some fresh supply on Thursday and largely shrugged off upbeat Australian employment details. In fact, the number of employed people unexpectedly rose by 178.8K in October as compared to consensus estimates pointing to a reading of -30K.

Further details revealed that the unemployment rate edged higher to 7.0% during the reported month from 6.9% previous. Nevertheless, the reading was still better than market expectations for a rise to 7.2%, though did little to impress bullish traders or assist the AUD/USD pair to attract any meaningful buying.

The US dollar witnessed a modest short-covering move during the first half of the trading action on Thursday and was seen as a key factor exerting some pressure on the AUD/USD pair. However, dovish Fed expectations might cap the upside for the greenback and help limit the losses for the major, at least for the time being.

Despite optimism over a potential vaccine for the highly contagious coronavirus disease, investors remain concerned about the economic fallout from the imposition of new restrictions in several US states. This, in turn, fueled expectations of further stimulus from the Fed, which should hold the USD bulls from placing aggressive bets.

Market participants now look forward to the US economic docket, featuring the releases of Philly Fed Manufacturing Index and Initial Weekly Jobless Claims. The data, along with developments surrounding the coronavirus saga and the broader market risk sentiment, might produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch