AUD/USD surrenders positive data-led early gains, back around 0.79 mark

The AUD/USD pair reversed upbeat data-led spike to session high level of 0.7923 and refreshed session lows during the early European session, albeit has recovered few pips thereafter. 

The pair caught some fresh bids during Asian session on Thursday in wake of better-than-expected Chinese manufacturing PMI and Australian private capex figures. The uptick, however, turned out to be short-lived and the pair now seems all set to extend previous session's rejection slide from the key 0.80 psychological mark. 

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Persistent US Dollar buying interest, backed by a modest pickup in the US Treasury bond yields was seen weighing on higher-yielding currencies and dragged the pair back closer to 0.7885 immediate support.

Meanwhile, the prevalent bullish sentiment around commodity space, especially copper, underpinned demand for commodity-linked currencies, including the Australian Dollar and helped limit further losses, at least for the time being.

Next in focus would be the US economic docket, featuring the release of personal income/spending data along with the Fed’s preferred inflation gauge – core PCE price index and followed by Chicago PMI and pending home sales data, would now be looked upon for some fresh impetus later during the NA session. 

Technical levels to watch

Weakness below 0.7885 level could get extended towards 0.7865 support (last Thursday’s low), which if broken is likely to accelerate the fall towards 50-day SMA support near the 0.7835-30 region.

On the flip side, bulls would be eyeing for a follow through momentum beyond 0.7925 level, above which the pair is likely to aim towards surpassing 0.7965 intermediate horizontal resistance and conquer the 0.80 handle.