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In the Asian session, the AUD / USD pair displayed a less assured rebound to near 0.6580. The Australian dollar has been trading between 0.6580 and 0.6636 for the past two sessions. The release of U.S. Nonfarm Payrolls (NFP) data will provide distinct direction, so investors should prepare for extreme volatility.

After a slightly lengthier gradual correction, the US Dollar Index (DXY) is accumulating a cushion around 105.20. The release of the US NFP will prompt action because it will indicate whether the Federal Reserve (Fed) will continue its moderate rate of rate hikes or revert to an aggressive rate hike strategy.

Despite a one-time decline in the monthly Consumer Price Index, the Reserve Bank of Australia (RBA) has favored postponing future policy-tightening, which is expected to keep the Australian Dollar on edge (CPI).

AUD / USD is hovering near the margin of the hourly Inverted Flag chart pattern. An Inverted Flag is a trend-following pattern characterized by a prolonged consolidation followed by a collapse. Typically, the consolidation phase of a chart pattern functions as an inventory adjustment in which participants initiate shorts, preferring to enter an auction after establishing a bearish bias.

The 20-period Exponential Moving Average (EMA) at 0.6600 is acting as a significant barrier for the Australian Dollar.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

A breakdown of Wednesday's low at 0.6568 will push the asset toward the horizontal support drawn from the October 4 high at 0.6547, followed by the round-level support at 0.6500.

In an alternative scenario, a break above Wednesday's high of 0.6629 would send the Australian dollar toward the low of December 22 at 0.6650. A breach above the same might expose the major to February 27 low near 0.6700.

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