- A combination of supporting factors pushed AUD/USD higher for the third straight session.
- The prevalent risk-on environment weighed on the safe-haven USD and remained supportive.
- The aussie got an additional boost following the release of domestic employment details.
The AUD/USD pair trimmed a part of its intraday gains and was last seen trading just above mid-0.7700s during the early European session.
The pair built on this week’s goodish bounce the 0.7660-55 area and gained some follow-through traction for the third consecutive session on Thursday. The prevalent risk-on mood continued undermining the safe-haven US dollar and benefitted the perceived riskier Australian dollar.
The global risk sentiment remained well supported by hopes that more aggressive fiscal spending under Joe Biden’s presidency will boost economic growth. In fact, Biden pitched a plan to pump $1.9 trillion into the struggling US economy during his first hours as the new US President.
The aussie got an additional boost following the release of better-than-expected domestic employment details, which showed that the unemployment rate fell to 6.6% in December. The reading was below consensus estimates pointing to a downtick to 6.7% and also marked the lowest level since April.
Adding to this, the economy added 50K jobs during the reported month. That said, a slowdown in full-time employment held bullish traders from placing aggressive bets. This, in turn, kept a lid on any runaway rally for the AUD/USD pair, which has now retreated around 20 pips from daily tops.
Moving ahead, market participants now look forward to the US macro data for some short-term trading impetus. The US economic docket features the release of Philly Fed Manufacturing Index, the usual Initial Weekly Jobless Claims and housing market data – Building Permits and Housing Starts.
This, along with the broader market risk sentiment, might influence the USD price dynamics and produce some trading opportunities around the AUD/USD pair.
Technical levels to watch
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