AUD/USD sees soft pullpack from 0.6455 after Thursday rally

• The AUD/USD has pulled back to around 0.6430 after rallying to three-week high.
• Profit-taking likely on the cards heading into the Friday market session.
• The US Dollar is broadly lower after global markets turned heel post-Fed.

The AUD/USD saw a two-day rally that saw the Aussie (AUD) lift nearly 1.9% against the US Dollar (USD) after broader markets dumped the Greenback following a dovish Federal Reserve (Fed) on Wednesday that has investors cheering for the perceived end of the Fed rate hike cycle.

Despite the overall market's risk-on mood, hopes for the beginning of an impending Fed rate cut cycle may prove to be a touch premature; money markets are currently pricing in the first Fed rate cut to take place sometime in the back half of 2024.

Forex Today: Dollar weakens further ahead of NFP

Another US Non-Farm Payrolls (NFP) Friday is on the cards to close out the trading week, but first Australian Retail Sales for the 3rd quarter will land early in the Asia market session. Aussie Retail Sales last printed to the downside at -0.5%, and the near-term Aussie bull run will need a healthy rebound in the headline figure to maintain the week's bullish lean.

Investors will be mostly looking out for US NFP and wage growth figures to close out Friday's trading session. Markets are expecting the pace of US jobs growth to slow to 180K for October, down from September's 336K printing.

US Average Hourly Earnings are expected to show a month-on-month acceleration, with the annualized figure forecasting a minor downtick.

MoM wage growth for October is forecast to increase from 0.2% to 0.3%, while wages for the year into October is expected to shift down from 4.2% to a flat 4.0%.

AUD/USD Technical Outlook

The Aussie has rallied past the 50-day Simple Moving Average (SMA) currently churning just south of the 0.6400 handle, and the intraday pullback from today's high is seeing potential for a near-term rejection of the 0.6450 level.

A sustained bull run will need to gather enough momentum to break through the 0.6600 handle, with the 200-day SMA turning down into 0.6625 just above.

On the low end, a return to the 0.6300 level will see the AUD/USD set to make a fresh challenge of 2023's low bids.

AUD/USD Daily Chart

AUD/USD Technical Levels