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  • The prevalent USD selling bias helped build on the recent up-move.
  • Bulls seemed rather unaffected by softer Aussie retail sales figures.
  • Fading US-China trade optimism capped gains amid thin trading.

The AUD/USD pair failed to capitalize on its early uptick to near two-month tops and has now retreated to the lower end of its daily trading range, around the 0.7030 region.

The pair continued gaining positive traction for the third consecutive session on Thursday and built on the post-RBA bounce from 50-day SMA amid the prevalent US Dollar selling bias. The ongoing slide in the US Treasury bond yields to their lowest level in more than 2-1/2 year lows kept the USD bulls on the defensive and remained supportive of the recent up-move.

The buck was further pressurized by Wednesday’s disappointing US macro data, showing that the US private-sector employers added less-than-expected 102K jobs in June while the ISM non-manufacturing PMI fell to 55.1 as compared to 55.9 expected and 56.9 previous, which reinforced market expectations that the Fed will eventually cut interest rates in July.

The pair showed some resilience and seemed rather unaffected by a slight miss from Thursday’s Australian monthly retail sales figures for the month of May, though fading optimism over a quick resolution to the prolonged US-China trade dispute turned out to be the only factor that kept a lid on any subsequent up-move for the China-proxy Australian Dollar.  

Meanwhile, investors also seemed reluctant to place any aggressive bets amid relatively thin liquidity conditions on the back of the Independence Day holiday in the US and ahead of Friday’s important release of the closely watched US monthly jobs report – popularly known as NFP, which might play a key role in determining the pair’s next leg of a directional move.

Technical levels to watch