AUD/USD rallies on weaker US jobs data, bulls await a sustained move beyond 0.70 mark

   •  Traders start pricing in more than one Fed rate cut on dismal US jobs report.
   •  The US bond yields tumble and exert fresh downward pressure on the USD.
   •  Fears of a further escalation in the US-China trade tensions cap strong gains.

The AUD/USD pair rallied around 35-pips in reaction to dismal US monthly jobs report, albeit struggled to extend the momentum further beyond the key 0.70 psychological mark.

The headline NFP print showed that the US economy added only 75K new jobs in May, far weaker than 1785K expected and worse than the previous month's downwardly revised reading of 224K (263K reported originally).

Meanwhile, the unemployment rate held steady at a multi-decade low level of 3.6% but was largely negated by softer wage growth data, showing that average hourly earnings slowed to 3.1% yearly pace during the reported month.

The data further fueled speculations that the Fed will eventually cut interest rates in 2019 and was evident from a sharp intraday slump in the US Treasury bond yields, which exerted fresh downward pressure on the US Dollar.

Despite the positive trigger, the pair struggled to capitalize on the move amid fears of a further escalation in the US-China trade tensions, which might turn out to be the only factor keeping a lid on any runaway rally for the China-proxy Australian Dollar.

Technical levels to watch