AUD/USD surges to fresh session tops, reverses Thursday’s downfall

   •  A modest USD retracement prompts some short-covering.
   •  Softer US bond yields supportive of the recovery move.
   •  Traders shrug off weaker commodity prices.

The AUD/USD pair built on its solid recovery move from 6-week lows and has now recovered all of its previous session's losses.

In absence of any fresh fundamental catalyst, the pair's latest leg of sharp upsurge, during the early NA session, was led by some a modest US Dollar retracement. 

A mildly softer tone around the US Treasury bond yields did little to assist the greenback to preserve its daily gains, led by another round of selloff across global equity markets, and prompted some short-covering move around higher-yielding currencies - like Aussie. 

Traders seem to have largely ignored weaker commodity prices, which tends to dent demand for the commodity-linked Australian Dollar, with the USD price dynamics acting as an exclusive driver of the pair's goodish recovery move from closer to the very important 200-day SMA. 

Nevertheless, the pair remains on track to post losses for the second consecutive week as the NY trading session gets underway on the last day of the week. 

Technical levels to watch

A follow-through buying interest has the potential to lift the pair further towards the 0.7860 hurdle (50-day SMA), which if cleared might negate the prevailing bearish bias and pave the way for some additional near-term recovery.

On the flip side, the 0.7800 handle now becomes an immediate support to defend, which if broken could accelerate the fall back towards 200-day SMA support near mid-0.7700s.