AUD/USD trims upbeat Chines PMI-led gains to over 3-month tops

The AUD/USD pair seems to have stalled its recent upsurge and has now retreated around 25-pips from over three-month tops, beyond the 0.7700 handle.

The pair gained some fresh traction during Asian session on Friday after Chinese data showed a pick-up in the manufacturing and non-manufacturing activity in June. in fact, the official Chinese manufacturing PMI ticked higher to 51.7 from 51.2 in May, while non-manufacturing PMI rose to 54.9 as compared to previous month's 54.5 and extended support to the China-proxy Australian Dollar.

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The pair, however, lacked strong follow through buying interest amid a continuous uptick in the US Treasury bond yields, which tend to weigh on higher-yielding currencies - like the Aussie. Adding to this, a modest greenback recovery, with the key US Dollar Index bouncing off yearly lows, further collaborated to the pair's retracement from higher levels. 

Moreover, possibilities of some profit taking, following the pair's recent upsurge of 175-pips over the past 6-days, could also be one of the factors dragging the pair back below the 0.7700 handle, to 0.7690-85 region.

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Meanwhile, the prevalent positive sentiment around commodity space, especially copper, was seen lending some support to commodity-linked currencies and seems to be the only factor helping the pair to hold with minor gains, at least for the time being.

Next in focus would be the US economic docket, featuring the release of personal income/spending data, core PCE price index, Chicago PMI and revised UoM consumer sentiment index, due later in the NA session.

Technical levels to watch

A follow through retracement now seems to find immediate support near 0.7670-65 region, below which the pair is likely to extend the corrective slide towards 0.7635-30 area en-route 0.7615-10 support.

On the upside, a sustained move above the 0.7700 handle has the potential to continue boosting the pair towards 0.7730 horizontal level ahead of yearly tops resistance near 0.7700s.