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  • AUD/USD reversed its direction after dropping to 0.7600 area.
  • US Dollar Index retreats below 93.00 during the European session.
  • Focus shifts to Markit and ISM Services PMI data.

The AUD/USD pair started the new week under modest bearish pressure and dropped to 0.7600 area in the late Asian session. However, the pair reversed its course amid a renewed USD weakness and was last seen gaining 0.38% on a daily basis at 0.7635.

USD’s market valuation continues to drive AUD/USD movements

The risk-positive market environment is making it difficult for the greenback to attract investors on Monday. The US Dollar Index, which tracks the USD’s performance against a basket of six major currencies, is currently down 0.18% on the day at 92.84. In the absence of significant fundamental drivers, the impressive jobs report from the US seems to be allowing risk flows to continue to dominate the financial markets.

On Friday, the US Bureau of Labor Statistics reported that Nonfarm Payrolls in March increased by 916,000, compared to the market expectation of 647,000. Furthermore, the Unemployment Rate dropped to 6% from 6.2% despite an uptick to 61.5% in the Labor Force Participation Rate. Reflecting the upbeat market mood, the S&P 500 Futures are up nearly 0.7% ahead of Wall Street’s opening bell.

The US economic docket on Monday will feature the IHS Markit’s final Services PMI reading for March and the ISM’s Services PMI report.  

On Tuesday, the Reserve Bank of Australia will announce its Interest Rate Decision and release the Rate Statement. Earlier in the day, Reuters reported that all but one of 24 economists surveyed saw no change to monetary policy at the RBA’s board meeting.  “One economist predicted a 5-basis point cut to 0.05%,” Reuters further noted.

Technical levels to watch for