AUD/USD pares the biggest daily jump in a decade around 0.7250, Aussie trade data eyed

• AUD/USD bulls take a breather around two-week top after the heavily daily jump since November 2011.
• Fed matched market forecasts of 0.50% rate hike, announced balance sheet normalization in June.
• Powell’s rejection of a 75 bps increase in Fed rate triggered much-awaited relief rally.
• Australia's trade numbers for March, China’s return and risk catalysts will be crucial for immediate directions.

AUD/USD dribbles around 0.7250 following the biggest daily jump since late 2011 as buyers struggle to digest the Fed-led gains ahead of the Australian trade numbers. Also likely to have tested the Aussie bulls during the early Asian session on Thursday are the cautious moves as China begins the week’s trading after multiple holidays.

Having initially cheered the US dollar pullback and upbeat Australia Retail Sales, not to forget keeping the post-RBA optimism, AUD/USD rallied 180 pips after Fed Chairman Jerome Powell rejected the idea of a 0.75% rate hike in the upcoming meeting.

The Fed, however, kept its word by announcing 50 basis points (bps) of a lift to the benchmark rate, as well as conveyed quantitative tightening to begin from June, initially with a $47.5 billion cap per month.

It’s worth noting that the softer prints of the US ISM Services and ADP Employment Change for April also offered a background for the AUD/USD upside.

Alternatively, anxiety ahead of the key Aussie data and EU’s sixth round of sanctions on Russia, as well as China’s covid woes, also join the forces to test the AUD/USD bulls as Beijing’s return to markets makes traders cautious.

That said, Australia’s headline Trade Balance may rise to 8500M in March versus 7457M prior. Aussie Building Permits for March and China’s Caixin Services PMI for April are also in the economic docket and will be important to watch for immediate directions, in addition to the risk catalysts.

Technical analysis

AUD/USD prices remain below the 100 and 200 DMAs, respectively around 0.7265 and 0.7285, despite the latest rally, which in turn teases a pullback towards the previously important hurdle, namely the March’s low of 0.7165.