Blow-Out NFPs Fuel Risk Rally- USD Resilient as QE Bets Subside

[akats]

The Australian dollar is the top performing currency against the greenback in early US trade with an advance of 0.47% on the session. Today’s blow-out non-farm payroll report showed the domestic economy added 243K jobs in January, besting calls for a print of just 140K with the unemployment rate unexpectedly falling to 8.3% from 8.5%. The report bodes well for the reserve currency as strong US data reduces the likelihood of further dollar diluting quantitative easing measures from the Fed. Still, the positive print continues to fuel the recent risk rally with high yielding assets advancing early in the session.

 

 

The AUD/USD continued to trade within the confines of an ascending channel formation dating back to December 19th with the pair currently trading just above the 123.6% Fibonacci extension taken from the December 19th and January 8th troughs at 1.0765. Topside targets for the aussie are eyed at the convergence of channel resistance and soft resistance at the 1.08-figure, backed by the 138.2% extension at 1.0835 and 1.0875. Interim support rests at 1.0745 with subsequent floor seen at the 1.07-handle, 1.0680, and the 100% extension at 1.0645. Look for topside moves in the aussie to remain tempered as we head into the weekend with trader looking to next week’s RBA interest rate decision where the central bank is expected to cut interest rates by 25-basis points.