AUD/USD nears weekly highs at 0.6560, with the US Dollar pulling back

I've been watching the Aussie Dollar climb against a weakened greenback today, and honestly, it's about time! The pair has pushed up to 0.6545, knocking on the door of weekly highs around 0.6560, and I'm betting we might break through that ceiling after the NFP report drops.

Let me tell you, those employment numbers from earlier this week were absolutely dismal for the US. Only 54K new jobs in the ADP report? That's half of July's figures! And those jobless claims hitting their highest since June? The writing's on the wall - the American labor market is cooling faster than most policymakers want to admit.

The Fed's been talking dovish all week too - these central bankers clearly see the same deteriorating employment situation I do. They're practically telegraphing a rate cut for September, though they'd never admit it so plainly.

Meanwhile in Australia, we got that surprisingly wide trade surplus yesterday which basically silenced all those doom-and-gloom analysts who've been predicting economic disaster from global trade tensions. The RBA's likely to hold steady in September - unlike their American counterparts who are scrambling to avoid a hard landing.

This monetary policy divergence is the real story here. While the Fed's about to start cutting rates aggressively, the RBA can afford to be patient. It's no wonder the Aussie is gaining ground.

Today's NFP report is the main event, of course. Market's expecting 75K new jobs, similar to July's pathetic 73K reading that sent the dollar tumbling. If we get anything below 70K, I expect the USD to absolutely tank across the board, pushing AUD/USD well above that 0.6560 resistance level.

The smart money is already positioning for a disappointing report based on those early indicators we've seen. This currency pair could be setting up for a significant upside breakout if the jobs data confirms what many of us already suspect - that the US economy is slowing much faster than previously thought.