• AUD/USD bulls face an uphill battle after mixed Australian Trade, Retail Sales data.
• The US dollar slips as Fed Chair Powell says ‘patience’ on rate hike after taper
• All eyes on the RBA Monetary Policy Statement and the US NFP release due Friday.

AUD/USD is off the highs but holds above the 0.7450 level following the release of the Australian Trade Balance and Retail Sales data, which came in mixed for September.

Read: Aussie Trade Balance surplus a positive for AUD

Despite the retracement, the aussie keeps its recovery mode intact amid the risk-on market mood. The Japanese traders return from a holiday and drive the Nikkei 225 index about 1% higher on the day, tracking another record run on Wall Street overnight. Meanwhile, the ASX 200 is adding 0.20% so far.

The upbeat mood can be attributed to the dovish comments from Fed Chair Jerome Powell, which failed to offer any fuel to the mid-2022 rate hike expectations. The Fed did announce the widely expected $15 billion worth of tapering on Wednesday but noted that the lift-off test is not met on the employment goal.

The dovish comments from Powell knocked the US dollar down, triggering a fresh upswing in the riskier assets such as the aussie dollar. Post-Fed, the currency pair is on a rebound from the lows of 0.7413, currently trading at 0.7461, up 0.22% on the day.

As the dust settles over the Fed’s aftermath, markets will shift their attention towards Friday’s Monetary Policy Statement from the Reserve Bank of Australia (RBA) and the US NFP release. Meanwhile, the pair will take cues from the US weekly jobless claims data and the risk tone for fresh trading opportunities.  

AUD/USD: Technical levels to watch out