AUD/USD pokes monthly high above 0.7800 on strong Australia Employment report

• AUD/USD extends Fed-led gains on upbeat jobs report at home.

• Australia Employment Change grew, Unemployment Rate dropped in February.

• Market sentiment stays positive post-Fed despite looming concerns over US-China meeting.

• Risk catalyst to keep the drivers seat, vaccine jitters, geopolitics will be the key.

AUD/USD gains another boost, this time from Australia employment data, to extend the latest run-up beyond the 0.7800 threshold, currently up 0.40% around 0.7830, during Thursday‘s Asian session. The aussie pair earlier cheered Fed’s dovish announcement and hopes of easy talks between Washington and Beijing during their first virtual meet, on the table for today.

Australias Employment Change grew past pre-pandemic peak while crossing 30K forecast and 29.1K prior with 88.7K whereas the Unemployment Rate dropped below 6.3% market consensus and 6.4% previous readouts to 5.8%. It should, however, be noted that the Participation Rate eased from 66.2% to reprint 66.1% level.

Not only the upbeat data but the risk-on mood also favors AUD/USD bulls to keep reins above 0.7800.

Among the market-positive headlines, the Feds rejection of rate-hike, at least until 2024, could be the first to recollect. Secondly, chatters that New Zealand and Australia will ease border control also offered help to the Aussie currency. Furthermore, news that AstraZeneca is up for matching the short deliveries and there are multiple countries outside the European Union (EU) that keep using the covid vaccine back the market optimism.

On the contrary, recent headlines suggesting China‘s lack of enthusiasm from Thursday’s first virtual meeting with US President Joe Biden and the team seem to tab the bulls. Also on the negative side could be the discomfort among the US Federal Reserve policymakers over the no rate change scenario.

Against this backdrop, S&P 500 Futures rises 0.30% to refresh record top whereas Australias ASX 200 index trims the early-day gains while flashing 0.14% intraday losses.

Moving on, AUD/USD traders will keep their eyes on the risk catalysts as vaccine jitters and the Sino-American headlines are gradually firming up. Also important to watch will be the BOE‘s monetary policy and the US weekly jobless claims data. It should, however, be noted that odds of the US dollar corrective pullback can’t be ruled out and hence the pair bulls should be cautious.

Technical analysis

A clear upside break of the two-week-old falling trend line, currently around 0.7780, needs to cross Januarys top near 0.7820 to keep the AUD/USD buyers hopeful.

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