AUD/USD: Bulls in charge, although RBA has more work to do

• AUD/USD bulls are in charge following upbeat Aussie jobs and phase-one deal signing prospects. 
• Technical indicators are holding within positive levels for further upside potential.

AUD/USD has been making tracks back to the upside, with the market taking out buy stops below the prior trend resistance. The price is back to challenge the 200-day moving average in the open on Monday.

AUD/USD closed last Friday's US session higher by 0.17% having made a recovery high of 0.6906 from a low of 0.6882 on the day. Markets were closing the week on a high note, relishing in the euphoria continued headlines reporting on the likelihood of a 'phase-one' deal being signed into law – More on that here.  

Domestically, the calendar will be quiet for the week ahead following a barrage of Australian and Chinese data over the last coupled of weeks. All -in, a rate cut by the Reserve Bank of Australia is more unlikely to come as soon as February that it was before the Aussie jobs data. 

RBA has more work to do

"Westpac is expecting a modest gradual rise in unemployment and underemployment. We are a long way from the RBA’s full employment aim of 4.5% and if the Bank wants to use monetary policy to drive the economy in that direction, it has a lot more work to do," analysts at Westpac wrote, however. 

Week ahead should be the usual Xmas lull

Meanwhile, for the week ahead, the markets are likely to have trouble finding direction as we enter the holiday season. We on have durable goods orders on the docket during a short  Xmas lull. China’s December PMI likely eased on slower production and labour usage towards year-end.

AUD/USD levels

Valeria Bednarik, the Chief analyst at FXStreet explained that the daily chart for the AUD/USD pair shows that that the rally stalled around a bearish 200 DMA, although it holds on to gains well above the 20 and 100 DMA, with the shortest maintaining a bullish slope:

• AUD/USD Forecast: Rally needs to extend beyond 0.6930 price zone

Technical indicators hold within positive levels, although lacking directional momentum, putting at doubt a bullish continuation as long as the pair remains capped by sellers in the 0.6930 price zone. In the 4-hour chart, the risk is skewed to the upside, as the pair is above all of its moving averages, while technical indicators hold well into positive ground, although directionless.