AUD/USD sticks to modest intraday gains, remains below 0.6800 ahead of US NFP report

AUD/USD sticks to modest intraday gains, remains below 0.6800 ahead of US NFP report
  • AUD/USD attracts fresh buyers on Friday, though the intraday uptick lacks bullish conviction.
  • Recession fears act as a headwind for the Aussie amid some follow-through USD buying interest.
  • Traders now look forward to the closely-watched US NFP report for a fresh directional impetus.

The AUD/USD pair regains some positive traction on Friday and recovers a part of the previous day’s heavy losses. Spot prices, however, struggle to capitalize on the move and remain below the 0.6800 round figure through the early European session.

A modest recovery in the global risk sentiment, supported by the easing of strict COVID-19 restrictions in China, lends some support to the risk-sensitive Aussie. That said, concerns about a deeper global economic downturn keep a lid on the optimism, which, along with strong follow-through US Dollar buying, act as a headwind for the AUD/USD pair.

The USD draws support from Thursday’s upbeat US macro data, which pointed to a resilient US labour market and could allow the Federal Reserve to stick to its aggressive rate hike path. Traders, however, seem reluctant and prefer to wait for the release of the closely-watched US monthly jobs data, due later during the early North American session.

The popularly known NFP report could influence the Fed’s policy outlook and play a key role in driving the USD demand in the near term. This, in turn, should assist investors to determine the next leg of a directional move for the AUD/USD pair. This, in turn, warrants some caution for bulls and before positioning for any further appreciating move for the major.

Technical levels to watch

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