AUD/USD surges above 0.6600 on soft US jobless claims

• AUD/USD climbs over 0.60% as US unemployment claims hit 231K, exceeding expectations, weakening the dollar.
• Higher jobless claims contribute to falling US Treasury yields.
• RBA holds rates; Governor Bullock's comments open to future Cash Rate adjustments.

The Australian Dollar rallied against the US Dollar on Thursday, printed gains of more than 0.60%, due to the Greenback remained offered following a softer than expected US jobs report. The AUD/USD trades back above the 0.6600 threshold and gains 0.04% as Friday’s Asian session begins.

AUD/USD gains as softer US labor data and falling Treasury yields dampen Greenback’s appeal.

US economic data was the main reason behind the poor performance of the American Dollar. The US Bureau of Labor Statistics (BLS) revealed that people filling out forms for unemployment benefits exceeded estimates. Initial Jobless Claims for the week ending May 4 rose to 231K, exceeding the estimates of 210K, and showing an increase from the previous week's figure of 209K.

Following the data, US Treasury bond yields dropped, with the 10-year benchmark note rate down almost four basis points to 4.459%. The US Dollar Index (DXY), which measures the buck’s performance against a basket of six currencies, dropped 0.25% and is at 105.23 at the time of writing.

It should be said that the latest round of US jobs data revealed in May showed signs the labor market is cooling. According to ANZ Analysts, “The data follow further falls in job openings at the end of March and the April nonfarm payrolls showing the softest growth for seven months. Not too much can be read into one round of data, but the incoming data will be watched very closely for further evidence that US labour market momentum may be slowing.”

In the meantime, San Francisco Fed President Mary Daly commented that lowering inflation to the Fed’s target would be a bumpy ride. Daly noted that the last three months of data leave policymakers uncertain about the future of inflation.

On the Aussie’s front, the Reserve Bank of Australia (RBA) 's latest monetary policy decision to hold rates unchanged sponsored a leg-down in the AUD/USD despite “not ruling anything ir or our” regarding monetary policy. However, Thursday’s price action lifted the pair to a new three-day high at 0.6621.

RBA’s Governor Michele Bullock maintained a balanced tone at the press conference. Regarding rates, she mentioned that "we might have to raise, we might not," indicating the board's contemplation of rate hikes at this meeting.

AUD/USD Price Analysis: Technical outlook

From a daily chart perspective, the pair is neutral to upward biased, despite buyers reclaiming key resistance levels like the 0.6600 figure. Nevertheless, it remains shy of testing the latest cycle high seen at 0.6667, the March 8 high, which could exacerbate a rally toward 0.6700. Once cleared, the next resistance level would be the December 28 high at 0.6871.

On the other hand, if sellers push prices below the 100-day moving average (DMA) at 0.6577, subsequent losses are awaited. The next demand level would be the 50-DMA at 0.6535, followed by the 200-DMA at 0.6515.