AUD/USD rally from weekly lows, above 0.6830s on risk-on impulse, US NFP eyed

• Australia’s Trade Balance surplus, China’s stimulus, and a soft US dollar propelled the AUD/USD higher.
• US Initial Jobless Claims rose more than expected, showing moderation in the labor market.
• Fed’s Waller and St. Louis Fed President Bullard to cross wires later.

The Australian dollar erases Wednesday’s losses and is rising towards the June 14 swing low at around 0.6850, but has faced some resistance and retraced some 25 pips towards the 0.6820s region. At 0.6839, the AUD/USD portrays an upbeat market mood, which augments the appetite for riskier assets.

AUD/USD is rising on positive sentiment, higher Iron ore prices and a soft US dollar

Worldwide equities are trading in the green, bolstered by waning recession fears and China’s allowing local governments to issue $220 USD billion of debt in an infrastructure program to boost 2022 GDP. Meanwhile, a senior US official at the Secretary of State said that Secretary Blinken would not announce lifting tariffs to China’s products at his meeting with a Chines Foreign Minister.

The AUD/USD got bolstered by positive data in the Asian session. Australia’s Trade Balance printed a 9.5% MoM surplus in May, exceeding expectations, fueled by a jump in coal, coke, and briquette exports. Also, Iron Ore prices uptick to $115.14 a ton, a tailwind for the Aussie.

That said, the AUD/USD rose above the 0.6800 mark and extended its gains to print the daily high around the R2 daily pivot at 0.6848.

Meanwhile, the US calendar reported Jobless Claims for the week ending on July 2. The figures came higher than expected, though the labor market showed moderation. Furthermore, the Balance of Trade shrank the deficit from -$86.7 billion to -$85.5 billion, spurred by a jump in exports.

What to watch

The US calendar will feature Fed speakers in the week ahead, with Christopher Waller and St. Louis Fed President James Bullard, on Thursday. By Friday, the New York Fed President John Williams would cross wires, and the US Nonfarm Payrolls report for June will shed some light regarding the labor market conditions. Traders should also note the Average Hourly Earnings to check for hints of a wage-price spiral that could keep US inflation higher.

AUD/USD Key Technical Levels