AUD/USD eases from weekly tops, still well bid above 0.6500 mark
- AUD/USD gains some traction for the second straight session on Friday.
- The prevalent USD selling bias, the risk-on mood remained supportive.
- US-China tensions capped gains near 100-DMA ahead of the NFP report.
The AUD/USD pair trimmed a part of its early gains to fresh weekly tops, albeit has still managed to hold with decent gains, comfortably above the key 0.65 psychological mark.
A combination of supporting factors assisted the pair to build on the previous day's strong intraday rally over 125 pips and continue gaining some follow-through traction for the second consecutive session on Friday. Against the backdrop of the prevalent risk-on mood, the perceived riskier currency – the aussie – got an additional boost from the latest optimism over the re-opening the domestic economy after coronavirus-induced lockdown.
On the other hand, the US dollar added to the overnight losses and remained depressed on Friday amid increasing bets that worse-than-anticipated economic downturn could force the Fed push interest rates below zero. However, a modest bounce in the US Treasury bond yields helped limit any deeper USD losses. This coupled with concerns over worsening US-China relations further collaborated towards capping the China-proxy Australian dollar.
The AUD/USD pair stalled its bullish momentum near the 100-day SMA barrier, which should now act as a key pivotal point for short-term traders as the focus now shifts to the release of the closely watched US monthly jobs report.
Technical levels to watch