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The U.S. NFP report is up today!

Will the anticipated release fire up AUD bulls and extend AUD/USD’s uptrend?

Before moving on, ICYMI, yesterday’s watchlist looked at GBP/JPY’s triangle consolidation ahead of the BOE and ECB’s decisions. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

As expected, BOE and ECB raised interest rates by 50 bps to 4.00% and 3.00% respectively

Lagarde: ECB to raise rates by 50 bps in March and then re-evaluate subsequent path of its policies

SNB Chairman Jordan: further rate hikes “can’t be ruled out”

Canada’s building permits dropped by 7.3% vs. 14.9% gain in November

US initial jobless claims dropped to nine-month low of 183K

US factory orders up by 1.8% m/m vs. -1.9% in November, 2.2% gain expected

AU home loans fell for a 7th consecutive month, down by 4.2% m/m in December

Business activity and new work boosts China Caixin services PMI from 48.0 to expansionary 52.9 in January

Asian stocks pull back, dollar regains footing ahead of U.S. payrolls data

Upcoming Potential Catalysts on the Forex Economic Calendar:

Eurozone PPI reports at 10:00 am GMT
US NFP reports at 1:30 pm GMT
US unemployment rate at 1:30 pm GMT

US ISM services PMI at 3:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: AUD/USD

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart by TradingView

In a few hours, the U.S. will print its labor market numbers for the month of January.

Traders see the economy adding 193K jobs for the month, which just might push the unemployment rate from 3.5% to 3.6%.

An upside surprise could signal that the Fed will need to tighten its policies further to hit lower inflation levels.

The prospect of more Fed rate hikes could drag AUD/USD down from its consolidation and back to areas of interest like .7025 or .6975.

But if today’s reports support the Fed’s relief that the rate hikes and disinflation haven’t affected the labor market much, then Powell and his team would have enough room to slow down their tightening plans.

A labor market that’s not crashing hard enough to cause concern could spark risk-taking and push “risky” bets like the commodity-related AUD.

AUD/USD, which has been showing higher highs and higher lows since hitting a bottom at .6630, could rise from its current levels near the .7050 pyschological level.

The pair could find support from the 61.8% Fibonacci line and retest its monthly highs in the next trading sessions.