AUD/USD sees an upside above 0.6850 on expectations of lower US NFP

• AUD/USD is likely to display more gains above 0.6850 as the US NFP may display a downbeat performance.
• Lower US Average Hourly Earnings will hurt the paychecks of the households.
• Australia’s upbeat Trade Balance has strengthened aussie against the greenback.

The AUD/USD pair has turned sideways after facing minor resistance around 0.6850 in the late New York session. The asset is likely to extend its recovery and may surpass Thursday’s high at 0.6848 as investors are expecting downbeat US Nonfarm Payrolls (NFP) data.

As per the market consensus, the US economy has added 270k jobs in the labor market, significantly lower than the former release of 390k. Alongside, the Unemployment Rate may remain stable at 3.6%. It is worth noting that the generation of lower employment opportunities by the US economy doesn’t resemble a slowdown. The labor market has reached full employment levels and therefore, less room is available for the creation of more job opportunities.

Apart from that, investors' focus will remain on the Average Hourly Earnings, which will remain flat at 5.2%. The inflation rate in the US economy has jumped to 8.6% while the growth in the wage prices is not lucrative. This may reduce the ‘paychecks’ of the households and eventually their aggregate demand quantity-wise for durable goods. Also this week, the US ISM Services New Orders Index data remained vulnerable, which adds to the downside filters for the overall demand.

On the aussie front, the upbeat Trade Balance data has supported the antipodean. The monthly economic data landed at 15,965M, higher than the estimates of 10,725M and the prior release of 13,248M. Next week, the aussie employment data will remain in focus.