AUD/USD trims upbeat Chinese data-led gains

The AUD/USD pair trimmed some of the upbeat Chinese data-led strong gains, albeit has held on to its move above 0.7200 handle.

Currently trading around 0.7210 region, better-than-expected Chinese manufacturing PMI lifted the pair to session peak level near 0.7235 region. Adding to this, buoyant sentiment across commodity space, especially Copper, provided an additional boost to the pair's recovery move from closer to multi-month lows. 

The recovery, however, seems to have lost its upside momentum amid resurgent US Dollar buying interest, which remains underpinned on expectations of faster US economic growth on the back of President-elect Donald's Trumps proposed fiscal policies. Moreover, hawkish Fed outlook was further seen denting demand for higher-yielding currencies - like the Aussie, and might continue to restrict any sharp recovery. 

Later during NA session, the release of US ISM manufacturing PMI would be looked upon for reinforcement of strong economic activity and might provide fresh impetus for the greenback, eventually drive the AUD/USD major. 

Technical levels to watch

A follow through retracement below 0.7200 handle is likely to accelerate the slide back towards session low support near 0.7185 level below which the pair is likely to head back towards 7-month lows support near 0.7160 region. On the upside, 0.7235-40 area now seems to have emerged as immediate hurdle, which if cleared should lift the pair towards 0.7300 handle, with 0.7280 level acting as intermediate resistance.