AUD/USD soars above 0.6700 on upbeat Australian Employment data

• AUD/USD has scaled firmly above 0.6710 amid the release of upbeat Australian labor market data.
• Better-than-anticipated Australian Employment data would force the RBA to reconsider its steady policy stance.
• The USD Index is not showing any sign of recovery after dropping to near weekly lows around 101.44.

The AUD/USD pair has climbed above the round-level resistance of 0.6700 as the Australian Bureau of Statistics has reported upbeat Employment data. The Australian economy added 53K fresh jobs in March, higher than the consensus of 20K but lower than the former release of 64.6K. Also, the Unemployment Rate remained unchanged at 3.5% but lower than the estimates of 3.6%>

This is going to force the Reserve Bank of Australia (RBA) to reconsider its steady policy stance. Investors should be aware of the fact that RBA Governor Philip Lowe kept interest rates unchanged at 3.6% in its April monetary policy meeting.

Volatility in the Australian Dollar will stay further amid the release of China’s Trade Balance data. The street is expecting a deep contraction in Chinese exports and imports figures ahead. Also, the Trade Balance data (USD) is expected to plunge to $39.2B vs. the former release of $116.8B. It is worth noting that Australia is the leading trading partner of China and weak Chinese international trade would weigh on the Australian dollar.

Meanwhile, S&P500 futures have carry-forwarded downside journey as shown on Wednesday after the reading from Federal Reserve (Fed) minutes cemented fears of mild recession later this year. Apart from that, quarterly result season has also cautioned investors and a stock-specific approach has hogged the limelight.

The US Dollar Index (DXY) is not showing any sign of recovery after dropping to near-weekly lows around 101.44. Fed chair Jerome Powell is expected to pause its quantitative tightening process sooner as United States inflation has already softened significantly. For further guidance, US Retail sales data will be keenly watched.

Monthly Retail Sales data would contract by 0.4%, at a similar pace to the prior contraction. This might bolster the need to pause rates from the Fed.