AUD/USD rises towards 0.7250 on strong Australia jobs report but yields test bulls

• AUD/USD reversed early Asian losses on upbeat Aussie employment data.
• Australia Employment Change rose past forecast, Unemployment Rate dropped in December.
• Aussie Consumer Inflation Expectations eased, Westpac Consumer Confidence dropped for January.
• Market sentiment dwindles as yields regain after Biden’s speech but stock futures print gains too.

AUD/USD takes the bids to 0.7230, up 0.20% intraday, following the upbeat Australia employment data for December. In doing so, the Aussie pair reverses the early Asian losses to print the second consecutive positive day even if the US Treasury yields regain upside momentum.

That said, Australia’s headline Employment Change rose past 30.0K forecast to 64.8K while the Unemployment Rate dropped below 4.5% market consensus and 4.6% prior t o4.2%. Further, Fulltime Employment eased below 128.3K previous readouts to 41.5K and the Participation Rate also reprinted 66.1% figure versus 66.2% market forecasts.

Read: Breaking: Australia Employment Report: Upbeat details for December recall AUD/USD buyers

Earlier in the day, Westpac Consumer Confidence for January dropped to -2.0%, below -1.0% prior, whereas the Consumer Inflation Expectations for the said month dropped to 4.4% versus 4.8% prior.

It’s worth noting that optimism surrounding the Omicron peak to hit in late January also favors the AUD/USD bulls.

However, fears concerning the geopolitical tussles between Russia and Ukraine join the Sino-American trade tensions to weigh on the risk appetite and probe the AUD/USD bulls. Additionally, US President Biden’s praise to Fed Chair Jerome Powell’s style indirectly favors the Fed hawks and propels the US Treasury yields, which in turn weigh on the Aussie prices.

Read: US President Biden: Inflation has everything to do with supply chain

That said, the US 10-year Treasury yields remain firmer around 1.85% whereas the S&P 500 Futures struggle for clear direction.

Looking forward, the People’s Bank of China (PBOC) rate decision will be important for the AUD/USD traders ahead of the US Jobless Claims, Philadelphia Fed Manufacturing Survey for January and Existing Home Sales for December.

Technical analysis

AUD/USD extends bounce off the seven-week-old support line, suggesting further advances towards the 100-SMA level of 0.7280. However, any further upside will be challenged by the monthly peak of 0.7315.

Alternatively, pullback moves remain elusive beyond the stated support line of 0.7177. Adding to the downside filter is the monthly ascending trend line, near 0.7155.