AUD/USD: Well bid around 0.7320 on US debt ceiling optimism, RBA FSR ahead of NFP

• AUD/USD takes the bids to refresh intraday high around a three-week top.
• Market sentiment improves as US Congress passes extension of debt limit to early December, improving Sino-American ties.
• RBA FSR sounds cautiously optimistic, upbeat signals for September jobs report probe bulls amid Fed tapering tantrums.

AUD/USD remains on the front foot near a three-week top, up 0.16% intraday close to 0.7325 during early Friday.

The risk barometer pair tracks upbeat market sentiment to print gains on China’s return from a week-long holiday.

Behind brighter mood is the US Congress’ passage of the debt ceiling extension by $408 billion until early December 2021.

Elsewhere, Aussie Health Minister Greg Hunt’s third booster shot recommendation and the recent positive headlines over the US-China relations add strength to the upbeat sentiment.

Also favoring the AUD/USD bulls is the bi-annual release of the Reserve Bank of Australia’s (RBA) Financial Stability Review (FSR). The report stated the RBA’s hawkish bias as it “expected that output will rebound as the economy gradually reopens, reducing the risk to the financial system.”

Read: RBA's FSR: Expected that output will rebound as the economy gradually reopens

It should be noted, however, that the firming of the Fed tapering woes, amid stronger signals for an upbeat US Nonfarm Payrolls (NFP) keep the buyers cautious.

Amid these plays, the US 10-year Treasury yields gain 1.8 basis points to 1.59% by the press time, after rising to the four-month high the previous day. Further, Wall Street marked another positive day by the end of Thursday and S&P 500 Futures follow suit at the latest.

Looking forward, China’s reaction to the latest financial market developments and the chatters from the US Congress may entertain the AUD/USD bulls. However, the pre-NFP trading lull may keep the traders on their toes.

Read: US Nonfarm Payrolls September Preview: How far will markets go when the Fed tapers?

Technical analysis

Unless successfully crossing the 0.7320 key hurdle comprising multiple levels marked since July 19, AUD/USD bulls remain cautious before aiming the 0.7410 resistance confluence, including the early September peak and a descending trend line from June 25. Alternatively, a daily closing below the 21-DMA level of 0.7280 will