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  • The USD faded the post-NFP spike and assisted AUD/USD to rebound from one-month lows.
  • A strong rally in the equity markets prompted some profit-taking around the safe-haven USD

The AUD/USD pair quickly reversed the post-NFP slide to one-month tops and was last seen trading with modest losses, just above the 0.7700 mark.

The pair witnessed some follow-through selling for the third consecutive session and added to its intraday losses in reaction to the upbeat US monthly jobs report. The headline NFP showed that the US economy added 379K jobs in February and the previous month’s reading was also revised higher to 166K from 49K reported earlier.

Adding to this, the unemployment rate edged lower to 6.2% from 6.3%. The stronger labour market report momentarily pushed the yield on the benchmark 10-year US government bond above 1.60%, back closer to over one-year tops. This was seen as another factor that provided a goodish lift to the already stronger greenback.

The US bond yields, however, lacked follow-through. This, along with a sharp rise in the US equity futures, capped gains for the safe-haven USD and extended some support to the perceived riskier aussie. The AUD/USD pair rallied nearly 80 pips from daily swing lows, with bulls eyeing a move beyond the 0.7700 mark.

With Friday’s key data risk out of the way, the US bond yields will continue to play a key role in influencing the USD price dynamics amid the progress on a massive US fiscal spending plan. Apart from this, the broader market risk sentiment might also produce some short-term opportunities around the AUD/USD pair.

Technical levels to watch