AUD/USD eases below 0.80 as DXY re-approaches mid-90s

• AUD/USD struggles to extend gains above 0.80.
• DXY stages a modest recovery in the NA session.

After starting the day on a positive note amid upbeat data from Australia and China, the AUD/USD pair gained traction and broke above the 0.80 mark but struggled to hold there in the NA session. As of writing, the pair was trading at 0.7990, gaining 0.3% on the day.

The data from Australia showed that the employment increased by 34.7K in December, surpassing the market estimate of 9K. However, the unemployment rate ticked up to 5.5% from 5.4%, keeping the positive impact of the report limited. On the other hand, China announced that the GDP in the fourth quarter on a yearly basis expanded by 6.8% and beat the experts' expectation of 6.7%.

Although the broad-based greenback weakness allowed the pair to stay extend its gains above the critical handle, a modest recovery seen in the US Dollar Index in the US afternoon pulled the pair back below that level. After dropping to 90.20 on market speculation of the U.S. government shutting down on Friday, the index gained traction with the recent headlines suggesting that Senators were considering a very short spending bill in case the month-long funding bill failed to pass the Senate. As of writing, the index was still down 0.3% on the day at 90.40.

There won't be any macroeconomic data releases from Australia on Friday. The only data from the U.S. will be the UoM Consumer Sentiment Index.

Technical levels to consider

With a daily close above the 0.80 mark, the pair could aim for 0.8090 (Sep. 20 high) and 0.8125 (Sep. 8 high). However, with the RSI indicator on the daily chart staying above the 70 mark, buyers could stay hesitant to add to their positions before they see a meaningful technical correction. On the flip side, supports could be seen at 0.7905/0.7900 (Jan. 15 low/psychological level), 0.7860 (20-DMA) and 0.7760 (200-DMA).