AUD/USD struggles to build on Aussie jobs data-led tepid recovery
• Upbeat Aussie jobs report help rebound from multi-month lows.
• Rising US bond yields capping recovery gains.
• US tax bill vote holds the key.
The AUD/USD pair struggled to build on Aussie jobs data-led recovery move and now seems to have entered a consolidation phase near the 0.7600 handle.
The pair initially dipped to refresh multi-month lows following a slight disappointment from the headline Australian job figures, showing that the number of employed people during October rose by only 3.7K as compared to an increase of 17.5K expected.
The pair quickly rebounded from lows after details revealed that the unemployment rate dropped to the lowest level since Feb. 2013, at 5.4%, and the full-time employment rose 24.3k in October.
The US Dollar, on the other hand, held defensive in wake of mounting concerns over the fate of long-awaited US tax reform bill but failed to provide any additional boost to the pair's tepid recovery move.
Wednesday's US data that showed an uptick in the underlying inflation, which coupled with a steady October retail sales reaffirmed December Fed rate hike move. And hence, a modest rebound in the US Treasury bond yields kept a lid on any meaningful recovery for the higher-yielding Australian Dollar.
Later during the NA session, second-tier US economic data - weekly initial jobless claims and industrial production, might provide some trading impetus. The focus, however, would remain on a key vote on the US tax legislation, due later today, which might now play a key role in determining the pair's next leg of directional move.
Technical levels to watch
Any subsequent recovery move is likely to confront fresh supply near the 0.7620 region, above which a fresh bout of short-covering could lift the pair towards 0.7645-50 horizontal resistance. On the downside, the 0.7575-70 region remains an immediate strong support to defend, which if broken would turn the pair vulnerable to head towards testing the key 0.75 psychological mark with some intermediate support near the 0.7530 area.