AUD/USD rebound approaches 0.6700 as US default fears ease, Australia employment eyed
- AUD/USD grinds higher ahead of the key Aussie jobs report after bouncing off two-week low.
- US policymakers’ statements weigh on pessimism surrounding US debt ceiling expiry.
- Mixed Australia Wage Price Index, US housing numbers fail to impress traders.
- Upbeat Aussie employment report can validation RBA’s hawkish surprise and propel AUD/USD further towards the north.
AUD/USD portrays a typical pre-data anxiety around 0.6660 amid early hours of Thursday’s trading in Asia, after posting a notable rebound from a fortnight low. That said, the Aussie pair initially dropped on Wednesday amid mixed sentiment and downbeat Aussie data but the upbeat sentiment allowed the risk-barometer pair to recover ahead of the key Aussie data.
After a quick debt ceiling negotiations, the US policymakers appear quite optimistic as US President Joe Biden and House Speaker Kevin McCarthy both conveyed hopes of reaching an agreement over avoiding the default.
That said, US House Speaker Kevin McCarthy said in an interview with CNBC on Wednesday, "Now we have an opportunity to find common ground but only a few days to get the job done." Further, US President Joe Biden said that he is confident that they will be able to reach an agreement on budget and noted that it would be catastrophic if the US failed to pay bills, per Reuters. "Will have a news conference on Sunday on debt issue,” added US President Joe Biden.
On the other hand, the US data came in mixed while the Aussie Wage Price Index for the first quarter (Q1) of 2023 also arrived as unimpressive.
Moving on, AUD/USD pair traders should close attention to today’s Australia Employment data for April as the headline Employment Change is expected to ease to 25K, versus 53K prior, whereas the Unemployment Rate and Participation Rate may stay unchanged at 3.5% and 66.7% respectively. Should the data match downbeat forecasts, or show further easing of the jobs market, the RBA will have tough time justifying the latest hawkish surprise, which in turn can weigh on the pair prices.
Also read: Australian Employment Change Preview: Another strong report?
More importantly, headlines surrounding the US debt ceiling and second-tier US data can direct the AUD/USD moves amid a likely busy day.
Technical analysis
A daily closing beyond a convergence of the 21-DMA and 10-DMA, near 0.6685 at the latest, becomes necessary for the AUD/USD bulls to keep the reins. That said, repeated failures to cross 0.6700 keeps the pair sellers hopeful of visiting an upward-sloping support line from early March, close to 0.6610 at the latest.