- The US economy added 224K new jobs in June, surpassing estimates by a big margin.
- The USD rallied across the board as investors scaled back aggressive Fed rate cut bets.
The AUD/USD pair finally broke down of its 24-hour-old consolidative trading range and slipped farter below the key 0.7000 psychological mark in the post-NFP trading action.
After yesterday’s intraday pullback from near two-month tops, the pair remained under some selling pressure through the early half of Friday’s trading session and was being weighed down by a modest pickup in the US Dollar demand.
The already stronger greenback got an additional boost after the headline NFP print showed that the US economy added 224K new jobs in June, surpassing even the most optimistic estimates and three times more than the previous month’s downwardly revised reading of 72K.
Meanwhile, an unexpected uptick in the US unemployment rate to 3.7% from 3.6% previous and mostly stable wage growth data as against a modest rise anticipated was largely offset by the upbeat reading and forced investors to scale back expectations for aggressive Fed rate cut in July.
The odds for 50bps rate cut in July plunged to 11% from 27% before the release and triggered a fresh leg of an upsurge in the US Treasury bond yields, which eventually provided a goodish lift to the greenback and led to the pair’s sudden drop of around 25-30 pips over the past hour or so.
With today’s slide, the pair has now turned lower for the week and seems all set to snap two consecutive weeks of positive closing. The focus now shifts to the resumption of the US-China trade negotiations, which should continue to play a key role in influencing sentiment surrounding the China-proxy Australian Dollar.
Technical levels to watch
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