AUD/USD climbs to one-month tops, further beyond 0.7400 mark ahead of NFP

• AUD/USD continued scaling higher on Friday amid sustained USD selling bias.
• Bulls shrugged off dismal Australian retail sales data/China’s Services PMI print.
• The market focus remains on the closely-watched US monthly jobs report (NFP).

The AUD/USD pair broke out of its intraday consolidative range and shot to near one-month tops, around the 0.7425 region heading into the European session.

The pair prolonged its recent strong move up and continued gaining traction for the fourth consecutive session on Friday. This marked the fifth day of a positive move in the previous six – also the eighth in the previous nine – and was exclusively sponsored by a broad-based US dollar weakness.

Investors seem convinced that the Fed will wait for a longer period before rolling back its massive pandemic-era stimulus. Apart from this, fading hopes for an early lift-off dragged the yield on the benchmark 10-year US government bond below the 1.30% threshold and undermined the greenback.

Apart from this, the underlying bullish sentiment in the financial markets further dented demand for the safe-haven USD and benefitted the perceived riskier aussie. The combination of supporting factors helped offset weaker Australian and Chinese economic data released earlier this Friday.

The Australian Bureau of Statistics reported a larger than anticipated drop in retail sales during July amid COVID-induced lockdowns in the country's major cities. Separately, China's Caixin services PMI showed that activity in the country's services sector contracted sharply in August.

With the USD price dynamics turning out to be an exclusive driver of the AUD/USD pair's momentum, the market focus will remain on Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report could influence expectations about the likely timing of the Fed's tapering plans. This, in turn, will play a key role in driving the greenback in the near term and provide a fresh directional impetus to the AUD/USD pair.

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