AUD/USD holds weaker below mid-0.7900s, NFP in focus

The AUD/USD pair failed to benefit from today's upbeat manufacturing data and traded with mild negative bias through Asian session.

The pair struggled to build on overnight strong gains further beyond mid-0.7900s despite a big jump in the AIG Australian manufacturing index, coming in at 59.8 for August as compared to previous month's reading of 56.0. 

Even a better-than-expected Chinese Caixin manufacturing PMI, at six-month high level of 51.6 for August vs. 50.9 expected and 51.1 previous, did little to boost demand for the China-proxy Australian Dollar. 

With investors looking past yesterday's mixed US economic data, a modest pickup in the US Dollar demand seems to be one of the key factors weighing on the major. 

Heading into the big event risk - the very important release of US monthly jobs report (NFP), repositioning trade might continue to infuse some volatility in the FX market and provide some short-term trading opportunities in a rather dull trading session on Friday. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The 4 hours chart shows that the latest advance left the price above a horizontal 20 SMA and the 50% retracement of its July/August decline at 0.7935, although in the same chart, the Momentum indicator remains below its mid-lines, as the RSI indicator aims modestly higher around 53."

"The pair has a major resistance at 0.7965, where the pair topped mid August and it also has the 61.8% retracement of the mentioned slide, with a break above the level opening doors for an advance up to 0.8000 and beyond, should US employment data to be released early Friday disappoints" she added.