- AUD/USD gained traction for the second consecutive session on the last day of the week.
- The prevalent USD selling bias was seen as a key factor fueling the positive momentum.
- The USD bulls seemed rather unimpressed by a goodish pickup in the US bond yields.
The AUD/USD pair refreshed six-week tops during the early European session, with bulls making a fresh attempt to build on the momentum further beyond the 0.7800 round-figure mark.
The pair built on the previous day’s positive move and gained traction for the second consecutive session on Friday amid some follow-through selling around the US dollar. Wednesday’s disappointing US Initial Weekly Jobless Claims dampened prospects for a relatively stronger US economic recovery and was seen as a key factor weighing on the greenback.
The Australian dollar largely shrugged off a rather unimpressive domestic data, which showed that Retail Sales grew 0.6% MoM in January. This was well below consensus estimates pointing to a 2.0% increase but still marked a notable rebound from the 4.1% fall recorded in the previous month and remained supportive of the intraday positive move.
Meanwhile, a softer risk tone did little to lend any support to the greenback’s safe-haven status. Bulls also seemed rather unimpressed by a pickup in the US Treasury bond yields. The optimism that the US President Joe Biden’s proposed $1.9 trillion stimulus package would lead to a possible acceleration in inflation and continued pushing the US bond yields higher.
The AUD/USD pair has now moved well within the striking distance of multi-year tops set in January. A sustained move beyond will set the stage for an extension of the bullish trajectory and assist the pair to aim back to reclaim the 0.7900 round-figure mark.
Market participants now look forward to the US economic docket, highlighting the release of flash PMI prints (Manufacturing and Services) and Existing Home Sales data. This, along with the US bond yields, might influence the USD price dynamics and produce some trading opportunities around the AUD/USD pair on the last day of the week.