AUD/USD clings to gains above 0.70 handle but lacks follow-through

   “¢   Built on the overnight solid comeback, led by broad-based USD weakness.  
   “¢   Renewed optimism over US-China trade talks provided an additional boost.
   “¢   Further gains remained limited ahead of the latest US monthly jobs report.

The AUD/USD pair built on previous session’s remarkable comeback from almost a decade low and climbed further beyond the key 0.7000 psychological mark through the Asian session on Friday.

The US Dollar failed to capitalize on Thursday’s early up-move, boosted by haven-fueled buying interest, and was being weighed down by a combination of negative factors, which eventually assisted the pair to recover over 230-pips from the Asian session flash crash low level of 0.6771.  

The USD bulls largely ignored Thursday upbeat ADP report, showing that private sector employers added 271k new jobs in December, rather responded negatively to some dovish comments by Dallas Fed President Robert Kaplan and disappointing US ISM manufacturing PMI.

Adding to this, renewed optimism over a possible resolution to the US-China trade disputes provided an additional boost to the China-proxy Australian Dollar and collaborated to the pair’s follow-through uptick on the last trading day of the week.  

However, a modest USD rebound, this time supported by a goodish pickup in the US Treasury bond yields, coupled with traders’ reluctance to place aggressive bets ahead of today’s release of the US monthly jobs report (NFP) kept a lid on any runaway rally.  

Hence, it would be prudent to wait for a strong follow-through buying before confirming that a near-term bottom is already in place and traders start positioning for an extension of the overnight strong recovery move.  

Technical levels to watch