AUD/USD digesting yesterday’s strong up-surge, NFP holds the key

The AUD/USD pair traded with mid bearish bias and consolidated Thursday's strong gains to the highest level since Nov. 10.

Currently trading around mid-0.7600s, a modest recovery in the US treasury bond yields supported the US Dollar's recovery move from Thursday's 11-week low and is hindering flows towards higher-yielding currencies - like the Aussie. Moreover, disappointing Chinese PMI print is seen weighing on commodities, especially copper, and eventually denting demand for commodity-linked currencies, including the Australian Dollar. 

The pair, however, remains closer to yesterday's multi-week tops and today's mild retracement could be categorized as consolidating phase following yesterday's strong gains. The pair on Thursday surged to 0.7700 neighborhood in wake of record high Australian trade-surplus data, albeit retraced around 40-pips from high as investors preferred to take some profits off the table.

On Friday, the pair lacked a firm direction as investors preferred to sit on the sideline heading into the big event risk - the US jobs data. Today, NFP release would be looked upon for clues over the timing of next Fed rate-hike action and would thus, help investors determine the next leg of directional move for the major. 

Technical levels to watch

A follow through retracement below 0.7640 level is likely to get extended towards 0.7600 handle below which a fresh leg of corrective slide could drag the pair back towards 0.7555-50 horizontal support. Conversely, on sustained move above 0.7665 level (session peak), the pair is likely to make a fresh attempt towards reclaiming 0.7700 handle before heading towards 0.7720-25 horizontal resistance and 0.7760 strong hurdle.