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  • AUD/USD is posting modest losses on Friday, stays above 0.7400.
  • US Dollar Index struggles to stage a convincing rebound.
  • Investors await the labour market report from the US.

The AUD/USD pair closed the previous three trading days in the positive territory and touched its highest level since August 2018 at 0.7451 on Thursday. With investors staying on the sidelines ahead of key data releases from the US, the pair seems to have gone into a consolidation phase and was last seen losing 0.25% on the day at 0.7420.

Earlier in the day, the data from Australia showed that Retail Sales in October increased by 1.4%, compared to analysts’ estimate of 1.6%, and made it difficult for AUD/USD to preserve its bullish momentum.

Focus shifts to US NFP data

The risk-on market environment and the broad-based selling pressure surrounding the greenback allowed AUD/USD to register impressive gains this week. The S&P 500 and the Nasdaq Composite both hit fresh record highs on Thursday and the US Dollar Index (DXY) slumped to its lowest level in more than 30 months at 90.51 before recovering modestly.

Later in the day, the US Bureau of Labor Statistics will release the November Nonfarm Payrolls (NFP) data.

Investors expect the NFP to rise by 469,000 and a better-than-expected reading could cause the USD to come under renewed selling pressure. On the other hand, a negative reaction in Wall Street’s main indexes to a weak NFP report is likely to help the DXY start recovering its losses and cause AUD/USD to extend its daily slide. Ahead of this data, the DXY is down 0.09% on the day at 90.63.

Technical levels to watch for