AUD/USD challenging daily lows, around 0.7920 level

The AUD/USD pair came under some renewed selling pressure on Thursday and extended its retracement from closer to 26-month highs, touched earlier this week. 

The pair touched a 6-day low level of 0.7914 following a big miss on Australian trade balance data. In fact, the trade surplus narrowed more than expected to A$ 856 million in June, largely on account of a 1% drop in the exports, as compared to previous month's surplus of A$ 2.024 billion (revised lower from A$ 2.471 million).

   •  Australia: Trade Balance shrinks in June – TDS

The selling pressure aggravated after China Caixin services PMI also missed estimates, at 51.5 for July versus 51.9 expected, which further weighed on the China-proxy Australian Dollar. 

With markets looking past Wednesday's weaker ADP report on the US private sector employment, a modest US Dollar recovery from 15-month lows further collaborated to the heavily offered tone surrounding the major. 

Today's US economic docket features the release of usual weekly jobless claims, ISM non-manufacturing PMI and factory orders data, which would be looked upon for some short-term trading impetus ahead of the very important release of NFP data on Friday.

Technical levels to watch

Immediate support is pegged near the 0.7905-0.7900 area, below which the corrective slide could get extended towards 0.7875 strong horizontal support. A follow through weakness would turn the pair vulnerable to head back towards testing 0.7830 horizontal level. 

On the flip side, any up-move back above 0.7935 level might now confront fresh supply near the 0.7965 region, above which the pair is likely to make a fresh attempt to move back above the key 0.80 psychological mark.