AUD/USD holds above 0.6700 handle, lacks follow-through

• A modest USD rebound kept a lid on the ongoing bounce from multi-year lows.
• Fed rate cut expectations/sliding US bond yields helped limit any further losses.
• Traders eye the US ISM non-manufacturing PMI for some short-term impetus.

The AUD/USD pair struggled to capitalize on its early uptick and dropped to fresh session lows, around the 0.6700 round-figure mark in the last hour, albeit quickly recovered few pips thereafter.
 
The pair initially built on the overnight goodish intraday bounce of around 40 pips from multi-year lows and gained some follow-through traction during the Asian session on Thursday, albeit lacked any strong bullish conviction amid a modest US Dollar rebound.

Fails to capitalize on attempted bounce

The Greenback added to its recent losses and remained depressed through the early part of Thursday’s trading action in the wake of growing odds of another interest rate cut by the Fed – especially after Monday’s dismal US manufacturing data re-ignited concerns of a US recession.
 
As investors continue to price in Fed rate cut move at the upcoming meeting in October, some intraday recovery in the US Treasury bond yields extended support to the USD and turned out to be one of the key factors exerting some downward pressure on the major.
 
The Australian Dollar further seemed to be weighed down by Thursday’s softer domestic trade data, showing that surplus declined more-than-expected to 5.926 billion in August while imports and exports also fell short of consensus estimates, rather missed by a big margin.
 
Meanwhile, the downside remained limited, at least for the time being, as traders turned cautious and refrained from placing any aggressive bets ahead of Friday’s release of the closely watched US monthly jobs report – popularly known as NFP.
 
Heading into the key data risk, Thursday’s US economic docket – highlighting the release of US ISM non-manufacturing PMI – might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.

Technical levels to watch