AUD/USD refreshes weekly top above 0.6600 as RBA, Fed concerns join mild optimism ahead of US NFP

AUD/USD bulls stay in the driver’s seat as it renews weekly top near 0.6615 heading into Friday’s European session. In doing so, the Aussie pair cheer  |  02/06/2023 04:36

• AUD/USD takes the bids to refresh weekly top during two-day uptrend.
• Upbeat Aussie Minimum Wage contrasts with market’s RBA bets to prod AUD/USD bulls.
• Downbeat concerns about Fed, mixed US data and cautious optimism weigh on US Dollar.
• Risk catalysts, US employment report eyed for clear directions.

AUD/USD bulls stay in the driver’s seat as it renews weekly top near 0.6615 heading into Friday’s European session. In doing so, the Aussie pair cheers broad US Dollar weakness, as well as upbeat wage announcements from home, while ignoring fears of the Reserve Bank of Australia’s (Fed) policy pivot. Adding strength to the risk-barometer pair’s latest run-up could be the passage of the US debt-ceiling deal through the Senate.

Recently, Reuters conveyed the news that the US Senate clears the debt deal to avert default and sends it to President Joe Biden’s Desk for signature into law. It’s worth noting that the reduction in the hawkish bias for the Federal Reserve (Fed) and mixed US data previously favored the risk appetite and weighed on the US Dollar, which in turn allowed AUD/USD bulls to retake control after a two-day downtrend.

Earlier in the day, Australia’s Fair Work Commission’s (FWC) Annual Wage Review unveiled a 5.75% compulsory hike in the minimum wage to around 180K Australian workers.

The same bolsters the call for the RBA’s 0.25% rate hike in June, versus the ongoing talks that the Fed won’t announce any rate lift in the next meeting. The same help the AUD/USD prices even as some of the prominent analysts expect a policy pivot at the Aussie central bank. Among them are the top four Aussie analyst banks, namely ANZ, CBA, NAB & Westpac.

Against this backdrop, S&P500 Futures print mild gains around 4,230 as it defends the previous day’s bullish move, the biggest in a week, amid a lackluster session. Also portraying the market’s anxiety is the US 10-year Treasury bond yield that prints the first daily gain in six as it bounces off a two-week low to 3.61% by the press time. On the same line, the two-year counterpart steadies near the weekly bottom surrounding 4.35% following a three-day downtrend.

To sum up, RBA chatters and risk catalysts may entertain AUD/USD traders ahead of the all-important US jobs report and the last round of the Fed talks ahead of the pre-Federal Open Market Committee (FOMC) blackout period for policymakers. Also important to watch is the US Senate’s passage of the debt-ceiling bill. Forecasts suggest, Nonfarm Payrolls (NFP) to ease to 190K from 253K prior while the Unemployment Rate is also expected to increase to 3.5% from 3.4%.

Technical analysis

AUD/USD bulls cheer a clear upside break of the three-week-old previous resistance line, now immediate support around 0.6525, to aim for the 21-DMA hurdle of around 0.6630.