Australian Dollar (AUD/USD) today remains in the driver’s seat as it refreshes weekly tops near 0.6615 ahead of Friday’s European session. Thus, the Aussie pair is cheering the broad US dollar weakness, as well as upbeat wage announcements from the domestic market, while ignoring concerns about the Reserve Bank of Australia’s (Fed) policy pivot. Adding strength to the latest upside of the risk barometer pair could be the passage of the US debt ceiling deal through the Senate. Recently, Reuters reported that the US Senate has reached a deal on debt to avert default risks and has sent it to President Joe Biden’s desk to be signed into law. It is worth noting that the Federal Reserve’s (Fed) hawkish deterioration and mixed US economic data earlier supported risk appetite and weighed on the US dollar. In this regard, the strengthening of the AUD/USD allowed the bulls to take control after the previous two-day downtrend. On the same day, the Australian Fair Work Commission’s (FWC) Annual Wage Review announced a mandatory 5.75% increase in the minimum wage for about 180,000 workers in Australia. The announcement bolstered calls for a 0.25% interest rate hike from the Reserve Bank of Australia (RBA) in June, as opposed to ongoing talk that the Federal Reserve (Fed) will not announce any rate hike at its next meeting. This supported the AUD/USD price rally even as several prominent analysts noted concerns about the Australian central bank’s policy stance. Four leading Australian analyst banks, namely ANZ, CBA, NAB, and Westpac, are also watching the situation. Amid this backdrop, the S&P500 futures are posting mild gains around 4,230, maintaining the previous day’s bullish trend that was the biggest in a week, despite being in a lackluster session. Also indicating market anxiety was the first rise in six days in the 10-year US Treasury yield, which recovered from a two-week low to 3.61% at the time of writing. Meanwhile, the two-year bond yield held steady near a weekly low of around 4.35% after a three-day downtrend. In summary, Reserve Bank of Australia (RBA) talks and risk factors could provide comfort to AUD/USD traders ahead of the all-important US jobs report and the final round of Federal Reserve (Fed) talks before the blackout period before the Federal Open Market Committee (FOMC) policymaking meeting. Also important to watch is the passage of the debt ceiling bill by the US Senate. Forecasts suggest that Nonfarm Payrolls (NFP) are expected to drop to 190,000 from the previous reading of 253,000, while the Unemployment Rate is also expected to rise to 3.5% from 3.4%. In technical analysis, AUD/USD bulls are pleased with the break above the resistance line that has held for the past three weeks. Currently, this level is the immediate support level around 0.6525, with the next target eyeing the 21-DMA hurdle around 0.6630.


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