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  • Softer Australian retail sales prompted some profit-taking around AUD/USD on Friday.
  • The upbeat market mood undermined the safe-haven USD and might help limit the fall.
  • Investors look forward to the release of the US monthly jobs report for a fresh impetus.

The AUD/USD pair edged lower through the Asian session on Friday and was last seen hovering near the lower end of its daily trading range, around the 0.7425-20 region.

The pair witnessed some profit-taking on the last trading day of the week following the release of softer-than-expected Aussie Retail Sales data, which rose 1.4% MoM in October. The reading missed the preliminary estimate and also marked a slight deceleration from the previous month’s increase of 1.6%.

The AUD/USD pair, for now, seems to have snapped three consecutive days of winning streak and eroded a part of the overnight strong move up to the highest level since July 2018. The downside, however, is likely to remain limited amid the prevalent bearish sentiment surrounding the US dollar.

The optimism over the rollout of a vaccine for the highly contagious coronavirus disease and bets for more US fiscal stimulus revived hopes for a swift global economic recovery. This, in turn, undermined the USD’s safe-haven status and might extend some support to the perceived riskier aussie.

The USD bulls might also refrain from placing aggressive bets amid expectations that the Fed will expand its bond-buying program in December. This makes it prudent to wait for some strong follow-through selling before confirming that the AUD/USD pair has already topped out in the near-term.

Market participants now look forward to the release of the closely-watched US monthly jobs report – popularly known as NFP. The data along with the broader market risk sentiment, might influence the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch