AUD/USD rallies to near four-month high, eyeing 0.7400 mark ahead of NFP

• AUD/USD attracted fresh buying near the 0.7300 mark and shot to a multi-month high on Friday.
• Rallying commodity prices continued benefitting the aussie and remained supportive of the move.
• Bulls seemed unaffected by sustained USD strength and even shrugged off the risk-off impulse.

The AUD/USD pair built on its steady intraday ascent through the first half of the European session and shot to a near four-month high, around the 0.7375 region in the last hour.

The pair witnessed some selling during the early part of the trading on Friday in reaction to the news that Russian attacked Europe's largest nuclear power plant in Ukraine. The downtick, however, was quickly bought into near the 0.7300 mark and pushed the AUD/USD pair into the positive territory for the third successive day.

The recent monster gains in oil and metal prices that followed Russia's invasion of Ukraine continue benefitting commodity-linked currencies, including the Australian dollar. Apart from this, rising bets for an eventual interest rate hike by the Reserve Bank of Australia in 2022 further underpinned the domestic currency.

The worsening situation in Ukraine forced investors to take refuge in traditional safe-haven assets and lifted the US dollar to its highest level since June 2022. Bulls, however, seemed unaffected by sustained USD strength and even shrugged off the risk-off impulse, which tends to weigh on the perceived riskier aussie.

From a technical perspective, Friday's strong move up took along some short-term trading stops placed near a technically significant 200-day SMA and confirmed a near-term bullish breakout. This, in turn, provided an additional boost to the AUD/USD pair and contributed to the ongoing momentum to the highest level since November 10.

Market participants now look forward to the US economic docket, highlighting the release of the closely-watched US monthly jobs report (NFP) later during the early North American session. Any immediate market reaction is likely to be short-lived as the focus remains on developments surrounding the Russia-Ukraine saga.

Technical levels to watch