AUD/USD surrenders early gains to multi-day tops, NFP in focus
• Fails to capitalize on early up-move led by upbeat RBA monetary policy statement.
• Disappointing Chinese PMI/a modest USD rebound add to the downward pressure.
• The keenly watched NFP report might help determine the near-term trajectory.
The AUD/USD pair surrendered the majority of its early gains and has now retreated around 30-pips from to 4-day tops.
The pair built on this week's recovery move from sub-0.7500 level, near 10-month lows, and gained additional traction during the Asian session on Friday following an upbeat statement from the Reserve Bank of Australia.
The central bank, in the latest monetary policy statement, revised its growth and inflation forecasts higher, albeit provided little hints to hike interest rates in the near-term.
The positive factor, to a larger extent, was negated by disappointing Chinese Caixin services PMI, coming in at 52.9 for April, did little to provide any additional boost to the China-proxy Australian Dollar.
Meanwhile, the US Dollar has now started moving higher for the day and was further seen collaborating to the pair's retracement over the past couple of hours.
Currently hovering around the 0.7535 region, investors' attention will remain glued to the keenly watched US NFP report. The key focus will be on average hourly earnings growth, which if surprises on the upside might further fuel expectations for a steeper Fed policy tightening and prompt some fresh selling around higher-yielding currencies - like the Aussie.
Technical levels to watch
A follow-through retracement below 0.7525 level could get extended back towards retesting the 0.7500-0.7490 support area, which if broken might turn the pair vulnerable to resume with its prior depreciating slide.
On the upside, sustained move beyond 0.7550-60 immediate support zone might now assist the pair to head back towards reclaiming the 0.7600 handle before eventually darting towards its next major hurdle near the 0.7640-45 region.