AUD/USD pierces 0.7300 on upbeat Australia Employment, Ukraine-led risk-on mood

• AUD/USD extends the biggest daily rise in 16 months after Australia jobs report.
• Australia Employment Change, Unemployment Rate both flashed welcome numbers for February.
• Risk appetite remains mostly positive amid progress in Ukraine-Russia peace talks, Kyiv’s rejection to neutrality acted as a speed-breaker.
• Recovery in China’s covid conditions, push for measures to boost economy also favors Aussie buyers.

AUD/USD refreshed intraday high to 0.7305 following the strong beat of the Aussie jobs report for February during Thursday’s Asian session. Also supporting the risk-barometer pair is the mildly positive sentiment in the market, mainly due to the headlines from Ukraine and China.

Australia’s headline Unemployment Rate dropped to 4.0%, below 4.1% expected and 4.2% prior, whereas the Employment Change rose past 37K market forecast and 12.9K previous readings to 77.4K.

Read: Australian Employment data is solid and offering support to AUD

Other than the upbeat Aussie jobs report, cautious optimism in the market and recently positive signals from the latest customer China also underpin the AUD/USD upside.

On Wednesday, talks of a diplomatic compromise between Russia and Ukraine initially triggered the risk-on mood before news suggesting a deadlock on the proposed neutrality of Kyiv. The International Court of Justice’s order to Russia to suspend the invasion of Ukraine added to the risk of challenges for the peace talks, as well as market sentiment. Recently, Ukrainian President Volodymyr Zelenskyy hoped for the allies' assistance on control of air traffic for Russian military planes.

It’s worth noting that receding COVID-19 woes in China, due to Wednesday’s easing in daily infections, join China Vice Premier Liu He’s push for the measures to boost the economy in the first quarter (Q1) to keep the risk-appetite firmer.

Alternatively, the US Federal Reserve’s (Fed) 0.25% rate hike and expectations of seven more such rate lifts during 2022, coupled with upwardly revised inflation forecast, challenge the market sentiment and the AUD/USD prices.

Against this backdrop, Wall Street marked another positive day whereas the US 10-year Treasury yields refreshed the highest levels in two years before retreating to 2.172% at the latest. That said, the S&P 500 Futures print 0.20% intraday gains while flashing 4,365 as a quote by the press time.

Moving on, fresh covid updates from China will offer immediate direction to the Aussie pair while second-tier data from the US will entertain the pair traders afterward. Above all, headlines from Ukraine are crucial for the short-term trend forecast.

Technical analysis

A convergence of the weekly resistance line and the 200-DMA challenges the AUD/USD pair’s immediate upside around 0.7300-05, a break of which will quickly propel the quote towards the 0.7370 level.