AUD/USD heading back to Thursday’s multi-week high ahead of NFP

After an initial mild retracement to session low near 0.7310 area, the AUD/USD pair regained traction and is now headed back towards the top end of daily trading range.

Currently trading around 0.7345 region, the pair turned positive for the fourth consecutive session, despite of broad based US Dollar recovery, and moved within striking distance of three-week high level of 0.7356 touched on Thursday. 

Upbeat Chinese PMI releases eased concerns of a slowdown in the world's second largest economy and has been the key factor supporting the pair's strong recovery during the course of current trading week. 

Traders, however, remained cautious amid weaker sentiment surrounding commodity space, especially Copper. Moreover, the ongoing recovery trend runs the risk of a sharp reversal in case of upbeat monthly jobs report from the US, which would brighten prospects of faster Fed rate-hike actions and might attract fresh selling pressure around the higher-yielding currency - like the Aussie. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet, notes, "Only a daily close above the descending trend line would signal the bearish trend from the November 9 high has reversed."

He further writes, "On the other hand, rejection at the trend line hurdle followed by a day end close below 0.73 would shift risk in favor of a drop to Dec 23 low of 0.7160 over the next week."