AUD/USD consolidates in a range, flat-lined around 0.7725 region

• AUD/USD struggled to capitalize on upbeat aussie jobs-led uptick to over three-week tops.
• A softer tone surrounding the USD, the underlying bullish sentiment extended some support.
• US Retail Sales eyed for some trading impetus ahead of key Chinese macro releases on Friday.

The AUD/USD pair seesawed between tepid gains/minor losses through the Asian session and was last seen hovering in the neutral territory, around the 0.7720-25 region.

The pair got a minor lift during the early part of the trading action on Thursday and climbed to over three-week tops, around the 0.7745 region following the release of the upbeat Aussie jobs report. Data released by the Australian Bureau of Statistics showed that the economy added 70.7K new jobs in March, surpassing consensus estimates pointing to a rise of 35K.

Adding to this, the unemployment rate fell more than expected to 5.6% from 5.8% previous. This, along with the underlying bullish sentiment in the financial markets, benefitted the perceived riskier Australian dollar. However, concerns that people could lose their jobs without the JobKeeper program kept a lid on any meaningful upside for the AUD/USD pair.

The negative factor, to a larger extent, was offset by a softer tone surrounding the US dollar. This, in turn, helped the AUD/USD pair to quickly recovery around 20 pips from the vicinity of the 0.7700 round-figure mark. The USD languished near three-week lows amid reduced bets for an earlier Fed lift-off, especially after Tuesday’s unimpressive US CPI report.

The data reinforced the Fed’s stubbornly dovish view that higher inflation will be transitory. Moreover, the Fed Chair Jerome Powell – speak at the Economic Club of Washington on Wednesday – reiterated that the US central bank will reduce its monthly bond purchased before committing to an interest rate increase, which is unlikely before the end of 2022.

It will now be interesting to see if the AUD/USD pair can regain positive traction or the lack of any follow-through buying suggests that a solid bounce from sub-0.7600 levels has run out of steam. Market participants now look forward to the US economic docket – highlighting the release of monthly Retail Sales, Philly Fed Manufacturing Index and Initial Jobless Claims.

The data, along with the US bond yields will influence the USD price dynamics. Apart from this, the broader market risk sentiment will also be looked upon for some short-term trading opportunities around the AUD/USD pair. The focus will then shift to a slew of important Chinese macro releases, which will play a key role in driving the China-proxy aussie.

Technical levels to watch