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  • AUD/USD attacks an upper-end of 0.7740-60 trading range after refreshing one-month top.
  • Upbeat US data propelled equities, commodities and Antipodeans, Australian employment figures also offered an extra fuel to the run-up.
  • US Treasury yields dropped to one-month low, US dollar portrayed corrective pullback.
  • China GDP, Industrial Production and Retail Sales can entertain traders.

AUD/USD stays on the front foot near the one-month high, recently around 0.7750 as bulls attack the top of the 20-pip trading range between 0.7740 and 0.7760, amid the early Friday morning in Asia. The aussie pair rose for the second consecutive day on Thursday while refreshing the highest level in a month amid a broad risk-on mood that favored the stocks and gold prices and offered a helping hand to the currencies of Australia and New Zealand. Also positive were better-than-forecast jobs report from Canberra and vaccine optimism at home.

Upbeat market sentiment awaits China data”¦

Be it a 48-year high Philadelphia Fed Manufacturing Survey or a strong rally in US Retail Sales for March, not to forget plummeting Weekly Initial Jobless Claims, American economics were all on the brighter side the previous day. The upbeat figures from the world’s largest economy backed the Fed’s call for faster economic recovery, which in turn highlights chatters over tapers and favored the US dollar index (DXY) to bounce off the lowest since March 18. Also favoring the greenback were the US-Russia tussles over Washington’s latest sanctions on Kremlin as well as Sino-American tension over Taiwan and Hong Kong.

At home, Australia’s employment figures for March came in strong, mainly led by part-time employment and a weak Unemployment Rate. Also favoring the Aussie bulls were optimism by Scott Morrison over the vaccine process despite concerns over Johnson & Johnson jabs as well as unlocking of the virus-led activity restrictions.

More importantly, the overall optimism backed US equity benchmarks to refresh record top while the US 10-year Treasury yields dropped 6.2 basis points (bps) before testing the lowest in one month. Further, gold rose to the highest since February and also helped the Australian dollar to remain firm.

Although upbeat US figures and hopes of faster economic recovery, backed by smooth vaccinations, can favor AUD/USD bulls for a while, China’s first quarter (Q1) GDP will be the key amid recently mixed PMIs. Also important will be the March month’s Retail Sales and Industrial Production from the dragon nation.

“China’s economy went from strength to strength in 2020, registering an annual growth of 6.5%yr despite the ill effects of the pandemic in Q1, when annual growth fell to -6.8%yr. Annual  GDP  growth for the first half of 2021 will be flattered by base effects. Still, our forecast of a 19.1%yr gain in Q1 2021 will also be a circa 5% annualized gain quarter on quarter, fuelled by broad-based strength in investment as well as demand from the consumer.  Industrial production  (market f/c: 26.5%yr YTD),  fixed asset investment  (market f/c: 26%yr YTD) and  retail sales  (market f/c: 31.7%yr YTD) will all reveal that not only has China recouped its losses, but built a strong foundation for a long and robust new growth cycle,” said Westpac.

Technical analysis

A clear break of 0.7760-65 becomes necessary for the AUD/USD bulls before targeting the 0.7800 threshold, needless to mention the previous month’s peak surrounding 0.7850. Alternatively, a downside break of 50-day SMA around 0.7720 should recall the sub-0.7700 area on the chart.