AUD/USD pops and drops below 0.6450 amid mixed Aussie employment data

• AUD/USD prints four-day losing streak after Australia’s April month jobs report.
• US dollar struggles amid mixed sentiment concerning negative Fed rates.
• US-China tension, risk of virus resurgence exert downside pressure on the pair.
• US data, trade/virus updates will be the key to fresh impulse.

AUD/USD drops to 0.6435, after an initial spike to 0.6470, as Aussie employment figures flashed mixed signals on early Thursday. The pair also bears the burden of risk-off sentiment.

Australia’s April month Unemployment Rate bear 8.3% forecast to 6.2% whereas Employment Change came in weaker than -575K forecast to -594.3K.

Read More: Breaking: Australia April unemployment rate +6.2 pct, s/adj (Reuters poll: +8.3)

Earlier during the day, Australia’s Consumer Inflation Expectations for May slipped below 4.6% prior to 3.4%. Though the pair shrugged off the data as the US dollar consolidates the recent gains.

The greenback slipped after concerns renew for the Fed’s negative rates after US President Donald Trump and Treasury Secretary Steve Mnuchin spoke bearish.

Also likely to have limited the pair’s downside could be expectations of a rate cut from the People’s Bank of China (PBOC). Bloomberg signaled that the PBOC will announce another rate cut to its medium-term lending facility (MLF) to ward off the liquidity challenges.

Even so, the US-China trade/political tension, as well as the risk of the virus wave 2.0, seems to exert downside pressure on the pair.

As a result, the US 10-year Treasury yields remain pressured below 0.65% with Asian stocks flashing mild losses by the press time.

Moving on, the Aussie traders will keep eyes on the US-China and virus headlines for fresh impulse ahead of the weekly US Jobless Claims figures. The employment gauge is likely to soften from 3169K to 2500K during the week ended on May 08.

Technical analysis

100-day SMA, near 0.6525 now, followed by the monthly top close to 0.6560/65, keeps the pair’s short-term upside capped. On the contrary, a confluence of a three-week-old ascending trend line and 21-day SMA around 0.6420/25 keeps the short-term declines limited, a break of which can drag the quote to the previous week’s low surrounding 0.6370.