AUD/USD hangs near YTD low, below 0.6400 as upbeat US jobs data lifts USD

• AUD/USD slides back below the 0.6400 mark amid the emergence of some USD buying.
• The upbeat US NFP report reaffirms Fed rate hike bets and boosts demand for the buck.
• The prevalent risk-off mood is exerting additional pressure on the risk-sensitive aussie.

The AUD/USD pair struggles to capitalize on its modest intraday bounce and attracts fresh sellers near the 0.6430 region during the early North American session. Spot prices slide further below the 0.6400 mark in reaction to the upbeat US jobs data and move well within the striking distance of the lowest level since April 2020 touched last week.

The US dollar catches some bids and hits a fresh weekly high after the closely watched US NFP report showed that the unemployment rate unexpectedly to 3.5% in September from 3.7% previous. Additional details revealed that the US economy added 263K new jobs during the reported month, beating consensus estimates for a reading of 250K. The data all but reaffirmed expectations that the Fed will stick to its aggressive policy tightening and continues to underpin the USD, which, in turn, is seen exerting some pressure on the AUD/USD pair.

The prospects for faster interest rate hikes by the US central bank trigger a fresh leg up in the US Treasury bond yields. This, along with the risk-off mood, boosts demand for the safe-haven buck and contributes to driving flows away from the risk-sensitive aussie. The market sentiment remains fragile amid worries about the economic headwinds stemming from rapidly rising borrowing costs and geopolitical risk. Moreover, a less hawkish Reserve Bank of Australia supports prospects for a further depreciating move for the AUD/USD pair.

Furthermore, acceptance below the 0.6400 mark could be seen as a fresh trigger for bearish traders. Hence, a subsequent slide back towards challenging the YTD low, around the 0.6365 region, remains a distinct possibility. The downward trajectory could further get extended and make the AUD/USD pair vulnerable to test the next relevant support near the 0.6300 round figure.

Technical levels to watch