AUD/USD fluctuates in narrow band above 0.71 ahead of NFP data

• Renewed trade optimism helps the AUD stay resilient.
• US Dollar Index stays calm around 97.30.
• Markets expect the NFP to rebound 180K in March from 20K in February.

Despite the broad-based USD strength on Thursday, the AUD/USD pair was able to cling to its daily gains as the heightened hopes of the U.S. and China reaching a trade deal allowed antipodeans to outperform its rivals. With trading action turning subdued ahead of the key macroeconomic data releases from the U.S., the pair is moving sideways in a tight range above the 0.71 handle.

Following President Trump's comments about the China trade deal "moving along nicely," Chinese news agency Xinhua reported President Xi Jinping and Vice Premier Liu He both were positive about the progress over trade negotiations and quotes Liu He saying that that new consensus over trade talks had been reached. Moreover, the AiG Performance of Construction Index from Australia improved to 45.6 in March from 43.8 in February to provide additional support to the AUD.

Meanwhile, the US Dollar Index, which recovered Wednesday losses and closed the day 0.2% higher on Thursday, is now moving sideways ahead of the labour market report. Previewing the data, "We expect nonfarm payrolls rose 190,000 in March and that average hourly earnings rose +0.25% m/m, implying a fall in the annual growth rate to 3.3% y/y from 3.4% y/y,” Danske Bank analysts said. “If we are right, the jobs report should support markets, which have rallied this week based on renewed growth optimism, as the US is not about to fall into recession just yet.”

• US NFP Preview: 10 Major Banks expectations from March payrolls report.

Technical levels to consider

The pair could face the initial resistance at 0.7130 (daily high/weekly range's upper limit) ahead of 0.7165 (Mar. 21 high) and 0.7200 (psychological level). On the downside, supports are located at 0.7100 (50-DMA), 0.7055 (Apr. 3 low) and 0.7000 (psychological level).