AUD/USD steadies below 0.6300, yields, central banks in focus

• AUD/USD remains sidelined after a volatile day that refreshed weekly top before retreating.
• Risk sentiment sours following an initial optimism, yields dribble around multi-year high.
• Australia reported downbeat job numbers for September, firmer Q3 NAB Business Confidence.
• Fears of recession propel yields, DXY while China’s covid headlines battled the bears.

AUD/USD treads water around 0.6280 during early Friday morning in Asia, after marking notable activity the previous day. The Aussie pair refreshed weekly top initially on Thursday amid cautious optimism in the market. However, fears of recession unearthed afterwards and triggered the quote’s pullback. Even so, the quote is up for posting the first weekly gain in six.

Be it upbeat prints of Australia’s quarter National Australia Bank’s (NAB) Business Confidence or China’s debate on reducing quarantine time for the international visitors, AUD/USD had some positives to renew the weekly top. However, the political jitters in the UK joined downbeat Aussie Employment Change for September to weigh on the quote.

Australia’s headline Employment Change rose 0.9K versus 25K expected and 33.5K prior while the Unemployment Rate and Participation Rate matched market forecasts of printing 3.5% and 66.6% figures respectively. On the other hand, National Australia Bank's (NAB) quarterly Business Confidence figures rose to 9 versus 5 expected and 7 prior and restrict the AUD/USD pair’s immediate downside.

Also, mixed US statistics and upbeat Treasury yields seem to keep the US dollar on the bull’s radar despite the latest pullback that teases the greenback gauge’s firmer weekly loss in three.

US Initial Jobless Claims eased to 214K for the week ended on October 07 versus 230K expected and a revised down 226K prior. Further, Philadelphia Fed Manufacturing Survey Index dropped to -8.7 for October versus -5 market consensus and -9.9 previous reading. Additionally, US Existing Home Sales rose past 4.7M expected to 4.71M but eased below 4.78M prior.

Elsewhere, Wall Street closed in the red following initially upbeat performance while the US 10-year Treasury yields rose to the highest since 2008.

Despite the mixed data and recently cautious optimism, the fears of high inflation pushing policymakers towards more/heavier rate hikes challenge the AUD/USD buyers. That said, risk catalysts are likely to be important for the clear directions amid a light calendar ahead of the US session.

Technical analysis

AUD/USD is up for challenging the six-week-old bearish channel, backed by weekly support line and upbeat MACD signals. However, a sustained trading beyond 0.6305 is necessary to convince the buyers.