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  • Trump’s criticism over Fed’s policy tightening capped the post-NFP USD upsurge.
  • Fading US-China trade optimism is likely to keep a lid on any meaningful up-move.

The AUD/USD pair ticked higher at the start of a new trading week, albeit seemed struggling to move back above the key 0.70 psychological mark.  

The pair on Friday stalled its pullback from two-month tops and once again managed to find decent support near 50-day SMA, retested in reaction to upbeat US monthly jobs report. The headline NFP report showed that the US economy added 224K new jobs in June and forced investors to scale back expectations for an aggressive Fed rate cut move later this month.

Market expectations were evident from a sharp upsurge in the US Treasury bond yields, which provided a goodish lift to the US Dollar and exerted some downward pressure on the major. Meanwhile, the US President Donald Trump’s fresh criticism about the Fed’s policy tightening capped any further USD appreciation and extended some support to the major.

The uptick, however, lacked any strong bullish conviction as investors still seemed reluctant to buy the China-proxy Australian Dollar amid fading optimism over a quick resolution of the prolonged US-China trade disputes and absent relevant market-moving economic releases.

The market focus now shifts to the Fed Chair Jerome Powell’s two-day Congressional testimony on Wednesday and Thursday, which might now play an important role in driving the near-term sentiment surrounding the USD and eventually provide a fresh directional impetus for the major.

Technical levels to watch