AUD/USD regains 0.7400 on market optimism, RBA’s Lowe, US NFP eyed

AUD/USD bulls flirt with the 0.7400 threshold as Asian traders brace for the NFP day, Friday. The Aussie pair benefits from the improved market sentiment ahead of RBA Governor Phillip Lowe’s testimony and the key US data.

After a dull start to Thursday, risk appetite improved during the US session amid news that the Senators are closer to infrastructures spending bill passage and may start negotiating the budget details as the debt limit pause expired. As per Bloomberg, the US Congressional Budget Office (CBO) sees the infrastructure bill widening the budget gap by $256 billion.

Also contributing to the risk-on mood could be the Fed policymakers’ unuttered optimism that the economy remains strong despite the Delta covid variant. The consensus gains support from upbeat US Jobless Claims data.

It should be noted however that Australia posted higher covid infections since August 2020 and numbers from the US, China and Japan also challenge the upbeat mood, also the AUD/USD prices.

Amid these plays, Wall Street benchmarks closed positive for Thursday while the US 10-year Treasury yields jumped the most in 12 days to 1.22%.

Looking forward, RBA Governor is up for testimony before the House of Representatives Standing Committee on Economics and bulls will be keen to reconfirm the hawkish tilt heard earlier in the week. Following that, RBA Monetary Policy Statement, China trade numbers and US employment data will be important to watch.

Read: US July Nonfarm Payrolls Preview: Analyzing major pairs' reaction to NFP surprises

Technical analysis

AUD/USD bulls battle 0.7400–0.7410 resistance area comprising level marked since early July. However, the Aussie pair’s ability to close beyond 21-day SMA amid bullish MACD signals do favor the buyers to aim for June’s low near 0.7480 during further advances.