AUD/USD: Fades upside momentum below 0.7600, eyes on Aussie employment

• AUD/USD drops after failing to refresh intraday top of 0.7580.
• Fed strikes dovish tone, Powell stays ready to ease further but nothing for now.
• US policymakers seem taking one more day for the much-awaited aid package, US-China tussle back in focus.
• Post-Fed run-up fizzles as bulls turn cautious ahead of the key data, events.

AUD/USD drops to 0.7570 while trimming the post-Fed gains during the early Thursday morning in Asia. The pair recently eased amid concerns over the US coronavirus (COVID-19) stimulus and the Washington-Beijing tussle. On late Wednesday, Fed’s dovish outlook and readiness for the Quantitative Easing (QE) helped the quote to flash a two-day uptrend.

With US Senate Majority Leader Mitch McConnell leaving the Capitol Hill building, the American aid package isn’t likely to arrive today. Even so, Senate Minority Leader Chuck Schumer repeats McConnell’s tunes while saying, “We’re fighting hard for stimulus checks in this COVID-relief bill. And, we believe we’ll get them.”

Other than the disappointment over not getting the much-awaited stimulus today, the US-China tension also weighs on the AUD/USD pair. Recently, US Trade Representative (USTR) Robert Lighthizer said, “If Biden administration eases China tariffs, will show u.s. ‘not serious’ about treating Beijing as strategic adversary.” It should also be noted that Canberra is also up for a fight with its major customer after Beijing recently stopped its coal and levied extra duties on wines and barley.

It should also be noted that the pre-Aussie data cautious mood adds a barrier to the pair’s upside momentum that got a boost after the Federal Reserve’s dovish showdown. The Fed refrained from any policy change during the latest decision while suggesting disinflationary pressure and readiness to ease. However, comments from Fed Chair Jerome Powell, suggesting economic revival in the second half of 2021, keeps the market players hopeful.

Trading sentiment sours off-late as Wall Street benchmarks closed mixed and S&P 500 Futures struggle for a clear direction.

Moving on, AUD/USD traders will pay close attention to November’s employment figures with down expectations.

Read: Australian Employment Preview: Positive surprise despite tepid forecasts

Technical analysis

An ascending trend line from January 2019, currently around 0.7580, tests the AUD/USD bulls. However, any downside above an ascending trend line from November 02 may not convince the bears.