Australian Dollar rebounds amid higher domestic equity market, firmer US Dollar

• Australian Dollar moves higher after recovering daily losses amid a stronger ASX 200 Index.
• Australia’s equity market strengthens following Friday's gains on Wall Street.
• US Dollar gained ground on the reduced likelihood of a Fed rate cut in June.
• US Nonfarm Payrolls added 303,000 new jobs in March, surpassing the anticipated 200,000 jobs.

The Australian Dollar (AUD) recovers intraday losses and moves into positive territory on Monday, likely influenced by gains in the domestic equity market. The ASX 200 Index sees upward movement during the week's opening session, particularly driven by a surge in tech stocks. However, the steady US Dollar (USD) may attempt to constrain the advancement of the AUD/USD pair.

Australian Dollar (AUD) faced challenges following the release of unchanged Final Retail Sales and downbeat Trade Balance data from Australia during the previous week. Notably, Australia reported its smallest Trade Surplus in five months for February, attributed partly to a decline in iron ore exports.

The US Dollar Index (DXY) gained ground on higher US Treasury yields following the release of robust Nonfarm Payrolls data from the United States (US) on Friday. The improved labor market performance has reduced the likelihood of a rate cut in June from the Federal Reserve (Fed). According to the CME FedWatch Tool, the probability of a rate cut has decreased to 46.1%.

Daily Digest Market Movers: Australian Dollar gains ground on higher ASX 200 Index

• Australia’s Trade Surplus (MoM) narrowed to 7,280 million in March, falling short of the expected 10,400 million and February’s reading of 10,058 million.
• Australia's Exports decreased by 2.2% month-over-month, contrasting with the previous increase of 1.6%. The nation’s Imports grew by 4.8%, compared to 1.3% prior.
• Australia's Final Retail Sales were unchanged at 0.3% in February, which is in line with expectations.
• The US Treasury stated Secretary Janet Yellen's meeting with China's Finance Minister Lan Foan, where they discussed the macroeconomic outlook and financial developments in both the United States and China. They also discussed the significant role that the Treasury and the Ministry of Finance can play in maintaining a durable communication channel between the two countries.
• Federal Reserve Bank of Dallas President Lorie K. Logan emphasized on Friday that, in light of the upward risks to inflation, she deems it premature to contemplate cutting interest rates. She stressed the necessity of resolving more uncertainty regarding the economic trajectory before making such decisions.
• US Nonfarm Payrolls (NFP) reported a significant increase of 303,000 jobs in March, surpassing expectations of 200,000 and the previous reading of 270,000.
• US Average Hourly Earnings rose by 0.3% month-over-month in March, meeting expectations. The previous reading was 0.2%. There was an increase of 4.1% on an annual basis, aligning with the market consensus but slightly lower than 4.3% prior.
• US Initial Jobless Claims for the week ended March 29 rose by 9,000 to 221,000 from the previous week’s reading of 212,000, below the market consensus of 214,000.
• US Challenger Job Cuts posted 90.309K for March against the previous reading of 84.638K.
• US ADP Employment Change rose by 184K in March, compared to the 155K increase in February, above the market consensus of 148K.

Technical Analysis: Australian Dollar could test the psychological barrier of 0.6600

The Australian Dollar trades around 0.6580 on Monday. The immediate resistance region is observed around the 61.8% Fibonacci retracement level of 0.6596, coinciding with the psychological level of 0.6600. A breakthrough above this level could potentially propel the AUD/USD pair to explore the area around the major level of 0.6650, followed by March’s high of 0.6667. On the downside, key support is identified around the nine-day Exponential Moving Average (EMA) of 0.6557 and the major support level of 0.6550. A breach below the latter could exert downward pressure on the AUD/USD pair, potentially leading it toward the psychological level of 0.6500.

AUD/USD: Daily Chart