AUD/USD preserves daily gains above 0.77, Trump's decision on next Fed chair eyed

• DXY struggles to recover losses amid falling T-bond yields.
• The AUD/USD pair is back above the 200-DMA for the first time in two weeks.
• Markets' focus is on US President Trump's announcement of the next Fed chair.

After spending the first half of the week in a 100-pip range, the AUD/USD pair advanced to its highest level since October 25 at 0.7730 on Thursday. As of writing, the pair is trading at 0.7724, adding 0.6%, or 50 pips, on the day.

US data failed to boost the greenback

Although today's data from the United States came in better than the market expectations, the greenback struggled to find demand as investors didn't want to get ahead of themselves before the announcement of the next Fed chair and tomorrow's nonfarm payroll report. In the meantime, markets are digesting the latest version of the GOP tax bill, which aims to reduce to taxes on corporations to 20% while keeping the income tax on the highest bracket unchanged. Speaking to reporters, Tax Committee Chairman Brady said that the initial tax bill would add $1.51 trillion to the federal deficit over a decade. After rising to a daily high at 94.70 on robust weekly jobless claims data, the US Dollar Index returned to mid-94s, where it's losing 0.2% on the day. A 1% drop seen in the 10-year US T-bond yields is making it difficult for the buck to erase is losses. 

• US: Weekly initial claims was 229,000, a decrease of 5,000 from previous week

Earlier in the session, the Associated Press claimed that Trump would announce Fed's Jerome Powell as the next Fed chair. "Powell is a ‘status quo’ candidate in the sense that he is considered to be a centrist like Yellen and he will most likely continue the current monetary policy strategy of gradual Fed hikes," Danske Bank analysts explain.

• FOMC meeting overshadowed by Fed chair announcement - Danske Bank

In the first trading hour of the Asian session, retail sales from Australia, which is expected to increase by 0.4% in September following a 0.6% contraction in October, will be released. An upbeat reading could help the aussie gain further strength against its peers.

Technical outlook

With today's upsurge, the pair surpassed the critical 200-DMA, which is located at 0.7910. A daily close above that level could open the door to 0.7775 (20-DMA), 0.7830 (Oct. 23 high) and 0.7880 (100-DMA). On the downside, supports could be seen at 0.7675 (daily low), 0.7620 (Oct. 27 low) and 0.7570 (Jul. 7 low).