AUD/USD flirting with daily highs above 0.7100 ahead of US ISM

• The pair regains some traction beyond the 0.7100 handle.
• AU manufacturing PMI rose to 54.0 in February from 52.5.
• US ISM manufacturing coming up later in the day.

Following a test of weekly lows near 0.7080 during overnight trading, AUD/USD managed to regain some composure and advance to levels above 0.7100 the figure, or daily highs.

AUD/USD looks to data, China

The Aussie Dollar is posting decent gains vs. its American peer at the end of the week, managing to reclaim the 0.7100 handle although staying in the negative territory for the second week in a row.

AUD picked up some pace after the Chinese Caixin manufacturing PMI rose above estimates in February although it remains in levels just shy of the expansionary threshold. In Australia, the AIG Manufacturing index ticked higher to 54.0 from 52.5 during last month while house prices contracted 0.9% on a monthly basis in February.

What to look for around AUD

The broad risk-appetite trends continue to drive the sentiment in the high-beta currencies and the commodity-bloc, always looking to headlines from the ongoing US-China trade negotiations. In the meantime, the recently confirmed neutral stance from the RBA plus the potential deterioration in domestic fundamentals has not only opened the door for further revisions lower in the economic outlook but it has also left a probable rate cut well on the table in the next months.

AUD/USD levels to watch

At the moment the pair is gaining 0.18% at 0.7106 and a breakout of 0.7198 (high Feb.27) followed by 0.7206 (high Feb.21) and finally 0.7256 (200-day SMA). On the flip side, the next support emerges at 0.7069 (low Feb.21) seconded by 0.7054 (low Feb.12) and finally 0.7021 (monthly low Oct.21 2018).