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  • AUD/USD struggles to hold above 0.7800 on Thursday.
  • US Dollar Index stays in the positive territory above 91.00.
  • Eyes on mid-tier US data, FOMC Chairman Powell’s speech.

The AUD/USD pair dropped to a daily low of 0.7753 on Thursday but staged a modest rebound during the early trading hours of the European session. After rising to a session high of 0.7815, however, the pair lost its traction and was last seen trading flat on the day at 0.7775.

Earlier in the day, the data from Australia showed that Retail Sales in January increased by 0.5%, compared to analysts’ estimate of 0.6%, but was largely ignored by market participants.

DXY holds above 91.00

Meanwhile, the risk-averse market environment is helping the USD gather strength against its rivals on Thursday. After closing in the positive territory on Wednesday, the US Dollar Index (DXY) is up 0.2% at 90.13 and the S&P 500 Futures are down 0.5%.

Later in the session, the US Department of Labor will release its weekly Initial Jobless Claims report and the US Census Bureau will publish January Factory Orders data. More importantly, FOMC Chairman Jerome Powell will be delivering a speech about the US economy at the Wall Street Journal jobs summit at 1705 GMT.  

Investors will pay close attention to Powell’s comments on Treasury bond yields. If the chairman continues to downplay the recent upsurge in yields, the USD could continue to outperform its rivals and weigh on AUD/USD.  

Powell Preview: Three scenarios for the Fed to defuse the bond bonfire, market implications.

Technical levels to watch for