The Australian Dollar (AUD) is maintaining a modestly positive stance, with bearish pressure being capped around the 0.6590 level. The currency pair is poised to remain within a trading range as traders eagerly await the release of the US Nonfarm Payrolls (NFP) report, while the Michigan Consumer Sentiment Index also looms as a potential market mover. On Friday, the Aussie is trading with moderate gains, building on a substantial rebound witnessed on Thursday. This rebound has left AUD/USD consolidating comfortably above the crucial 0.6600 level, setting the stage for a potentially pivotal session as US employment data takes center stage.
Recent data from the United States revealed an uptick in jobless claims, adding to the growing evidence that the US labor market is softening. This has fueled hopes among market participants that the Federal Reserve (Fed) may commence rate cuts as early as March next year.
US Nonfarm Payrolls Awaited with Bated Breath
The focal point of the day revolves around the release of the Nonfarm Payrolls report for November, which is expected to provide insight into the labor market's trajectory. After the less-than-optimistic readings from Tuesday's JOLTs Job Openings and Wednesday's ADP employment report, a robust NFP report could pose a dilemma for the Fed and trigger substantial volatility in the US Dollar.
Moreover, the University of Michigan is set to unveil the Preliminary Consumer Sentiment Index for December. This release carries its own potential to influence the US Dollar, especially if its figures align with the sentiment reflected in the NFP report.
Technical Outlook and Key Levels
From a technical standpoint, a notable bullish engulfing candle emerged on the daily chart on Thursday, providing a glimmer of hope for AUD/USD bulls. This development suggests potential upward momentum in the near term, especially as the critical support level at 0.6590 remains intact. Above the current levels, the currency pair has its sights set on 0.6655, followed by December's peak at 0.6690 as the next key targets for bulls to conquer.
Conversely, on the downside, if AUD/USD breaks below the 0.6590 support level, it may find additional support around 0.6525, with 0.6520 serving as another critical level for potential downside moves. As the market awaits the NFP report and additional economic data, technical levels are likely to be closely monitored by traders for potential breakout opportunities.
