AUD / USD remains stable around the 0.7725-30 region

• AUD / USD is struggling to capitalize on the rally to more than three-week highs fueled by the upbeat Australian jobs report.
• A softer tone around the USD and underlying bullish sentiment offers some support for the pair.
• The release of US retail sales could generate some business momentum ahead of key macroeconomic releases from China on Friday.

The pair AUD/USD oscillates between lukewarm gains and minor losses at the start of the European session on Thursday, remaining stable around the region of 0.7725-30.

The pair rose slightly during early trading action on Thursday and rose to more than three-week highs, around the 0.7745 region, after the optimistic release of the Australian jobs report. Data released by the Australian Bureau of Statistics showed that the economy added 70,700 new jobs in March, beating estimates that point to an increase of 35,000.

What’s more, the unemployment rate fell more than expected to 5.6% from 5.8% previously. This, coupled with underlying bullish sentiment in financial markets, has benefited the higher perceived risk Aussie. However, concerns that people could lose their jobs without the JobKeeper program has limited any significant rally for the AUD / USD pair.

The negative factor, to a greater extent, has been seen offset by a softer tone around the US dollar. This, in turn, has helped the AUD / USD to quickly rally around 20 pips from near the 0.7700 round level. USD has weakened near three-week lows amid reduced expectations of an early Fed tightening, especially after the unimpressive US CPI report Tuesday.

The data reinforced the Fed’s stubbornly pessimistic view that higher inflation will be transitory. Also, Fed Chairman Jerome Powell, speaking at the Economic Club of Washington on Wednesday, reiterated that the US central bank reduce your monthly bond purchases before committing to an interest rate increase, which is unlikely before the end of 2022.

Now it will be interesting to see if the AUD / USD pair can regain positive traction or the lack of subsequent buying suggests that the solid bounce from levels below 0.7600 has been exhausted. Market participants are now looking forward to the US economic calendar, highlighting the release of monthly retail sales, the Philadelphia Fed Manufacturing Index and initial jobless claims.

The data, along with US bond yields, will influence USD price dynamics. Apart from this, the broader market risk sentiment will also be considered to generate some short-term trading opportunities around the AUD / USD pair.

Subsequently, the focus of attention will shift to a number of major Chinese macroeconomic releases, which will play a key role in driving the AUD / USD momentum.

AUDD / USD technical levels