AUD/USD extends rally into third straight day, trades above 0.7770 ahead of US data

• AUD/USD advanced to a fresh weekly high on Thursday.
• US Dollar Index continues to push lower toward mid-91.00s.  
• Consumer Inflation Expectations in Australia rose to 4.1% in March.

The AUD/USD pair closed the previous two trading days in the positive territory and preserved its bullish momentum on Thursday. As of writing, the pair was trading at fresh weekly highs at 0.7775, gaining 0.52% on a daily basis.

Slumping US T-bond yields hurt USD

The broad-based selling pressure surrounding the greenback and the risk-positive market environment allow AUD/USD to continue to push higher.

The decent demand seen at Wednesday’s 10-year US Treasury note auction triggered a sharp decline in the US T-bond yields and put the greenback under strong bearish pressure in the second half of the week. At the moment, the US Dollar Index is losing 0.27% at 91.55, while the yield on the 10-year reference is down 2%.

On the other hand, the risk rally, as reflected by the strong performance of major European equity indexes and the 0.7% increase in the S&P 500 Futures, is helping the AUD outperform its rivals. Later in the session, the US Department of Labor’s weekly Initial Jobless Claims reports and the US Bureau of Labor  Statistics’ JOLTS Job Openings data from the US will be featured in the US economic docket.

Earlier in the day, the data from Australia showed that Consumer Inflation Expectations in March rose to 4.1% from 3.7% in February. Although this reading came in higher than the market expectation of 3.5%, it failed to trigger a significant market reaction.

Technical levels to watch for