The Aussie is trading with moderate gains on Friday, following a significant rebound on Thursday, which has left the pair consolidating above the 0.6600 level ahead of US employment data. Data from the US showed an increase in US Jobless claims, adding to evidence that the US labor market is loosening and increasing hopes that the Fed might start cutting rates next March. The main focus today is on November’s Nonfarm Payrolls report, which is expected to show a moderate improvement later today. After the downbeat reading of Tuesday’s JOLTs Job Openings and Wednesday’s ADP reading, a strong payrolls report would pose a headache for the Fed and might cause significant US Dollar volatility.
Somewhat later, the University of Michigan will release December’s Preliminary Consumer Sentiment Index, which might also impact the US Dollar, especially if it comes in the same line of the NFP. From a technical perspective, the bullish engulfing candle printed on the daily chart on Thursday is giving bulls hope while the 0.6590 support remains in place. Above here, 0.6655 and December’s peak, at 0.6590 are the next targets. On the downside, below 0.6590 the pair might find support at 0.6525 ahead of 0.6520.