Following the release of the NFP report, the AUD/USD made a decent recovery from multi-month lows.
Investors were disappointed by an unexpected increase in the unemployment rate, which impacted on the dollar.
The USD was further weakened by the continuous decrease in US bond yields, which remained favorable.
During the early North American session, the AUD/USD pair refreshed daily tops, with bulls now looking for some follow-through momentum beyond the crucial 0.7500 psychological mark.
Following the release of a mixed US monthly jobs report, the pair saw a stunning intraday recovery from near seven-month lows, rallying over 50 pips amid some US dollar profit-taking. The main NFP figure revealed that the economy added 850K new jobs in June, above even the most optimistic predictions.
Furthermore, the previous month’s reading was raised to 583K from 559K previously reported. Despite a positive hint that persistent labor shortages may be coming to an end, an unexpected increase in the unemployment rate to 5.9% from 5.8% in May caused investors to reduce their USD bullish bets.
Meanwhile, fixed income traders appeared to be disappointed by an increase in the unemployment rate. A steep drop in US Treasury bond yields demonstrated this, severely undermining the greenback. Aside from that, the risk-on mentality aided the perceived riskier aussie, prompting a short-covering rise in the AUD/USD pair.
The major has finally ended a four-day losing trend and shaved a portion of its weekly losses thanks to the last move up. Nonetheless, the AUD/USD pair is on course to close the week in the red, and its recent downturn appears vulnerable to being extended. As a result, any following rise could be viewed as a selling opportunity./n
