AUD/USD clings above 0.7180 as DXY tests monthly lows, Aussie GDP and US NFP in focus

• AUD/USD is sustaining above 0.7180 amid selling pressure in the DXY.
• Positive market sentiment has underpinned the risk-perceived currencies.
•  The US NFP could tumble to 310k while the annual aussie GDP may plunge to 1.6%.

The AUD/USD pair is holding itself strong near the previous week’s high at 0.7189 as a risk-on impulse has been preferred by the market participants on expectations of a slippage in the US Nonfarm Payrolls (NFP). Risk-sensitive currencies are gaining a lot of traction and the greenback has been dumped by investors. The major is advancing sharply to re-test its monthly highs at 0.7266 ahead of the Gross Domestic Product (GDP) numbers from aussie and NFP from the US.

The US dollar index (DXY) has tumbled in the early trade to its monthly lows at 101.43. A lower forecast of the US NFP has compelled the market participants to dump the safe-haven asset. A preliminary estimate for the US NFP is 310k against the prior print of 428k. Lower US NFP may trim the extent of hawkishness by the Federal Reserve (Fed). This might result in only one more 50 basis points (bps) interest rate hike by the Fed this year rather than the expectations of three jumbo rate hikes.

On the aussie front, investors are awaiting the release of the GDP numbers on Wednesday. The annual GDP is expected to plunge to 1.6% against the prior print of 4.2%. While the quarterly figure may slip to 0.6% vs. 3.4% prior print. A dismal performance from the antipodean could weaken the pair going forward.