AUDUSD pares recent gains at two-month high near 0.6700, Australia employment data eyed

• AUDUSD retreats from the 100-DMA, stays pressured around intraday low of late.
• Bulls take a breather amid a light calendar, Covid fears from China.
• Downbeat US data, risk-positive headlines from Beijing previously favored bulls.
• RBA Minutes, Aussie jobs report eyed for fresh impulse, bulls are likely to keep the reins amid Fed Pivot talks.

AUDUSD steps back from a two-month high to 0.6680, snapping a two-day uptrend, as market players seek more clues to extend the previous weekly run-up during Monday’s initial Asian session. In doing so, the Aussie pair also portrays the cautious mood ahead of the key data/events from Australia and the US amid a light calendar.

Even so, China’s latest easing in the Coronavirus-led activity restrictions and positive offers for the struggling reality sector joins the talks of the US Federal Reserve’s (Fed) easy rate hikes to keep the AUDUSD buyers hopeful. That said, China Communist Party (CCP) announced further easing of the Covid controls and measures taken to ease the pain of the real estate market by a 16-point plan that includes more loans, allowing delays in bond payments and alteration to property lending limits.

It’s worth noting that Friday’s US data joined the recent dovish comments from the Fed officials to keep the AUDUSD buyers hopeful. That said, the first readings of the University of Michigan Consumer Confidence Index for November dropped to 54.7 versus 59.5 market expectations and 59.9 previous reading. Recently, Fed Governor Christopher Waller said Fed can begin to consider moving at a slower pace.

On the contrary, policymakers from the Reserve Bank of Australia (RBA) have openly committed the readiness for easy rate hikes, which in turn keeps the AUDUSD buyers in chains. Also likely to challenge the pair buyers could be the multi-month high virus numbers from China, as well as the geopolitical fears of this week’s Group of 20 Nations (G20) meeting in Bali.

Amid these plays, US equities remained firmer even as the holiday in the bond markets restricted the moves the previous day. However, the return of full markets seemed to have challenged the AUDUSD buyers of late as S&P 500 Futures print mild losses as we write.

Moving on, a meeting between US President Joe Biden and China’s Prime Minister Xi Jinping will be of immedaite importance, considering the geopolitical tensions. However, the RBA Minutes will be closely watched ahead of the Aussie jobs report as policymakers are up for easy rate hikes. The likely pullback, however, remains elusive if the US Retail Sales join the recently downbeat consumer-centric data from the United States.

Technical analysis

Although the 100-DMA restricts immediate AUDUSD upside near 0.6700, the pair sellers remain off the table unless witnessing a clear downside break of the early October swing high surrounding 0.6550.