AUD/USD surges to fresh 2-1/2 month tops, around mid-0.7800s

   •  Upbeat Chinese PMI triggers the initial leg of up-move.
   •  USD recovery move seemed losing steam.
   •  Positive commodity prices remain supportive.

The AUD/USD pair quickly reversed an early Asian session dip and surged to mid-0.7800s, or fresh 2-1/2 month tops, in the last hour of trading.

Today's better-than-expected release of Chinese Caixin Services PMI print, coming in at 53.9 for December, underpinned demand for the China-proxy Australian Dollar and triggered the initial leg of up-move. 

Adding to this, the prevailing positive trading sentiment around commodity space, especially copper, remained supportive of the pair's bid tone for the tenth consecutive session.

Meanwhile, the overnight US Dollar recovery move, backed by upbeat ISM manufacturing PMI and perceived hawkish FOMC meeting minutes, now seemed losing steam and provided an additional boost to the pair's up-move.

Further gains, however, remained capped amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.

Later during the NA session, a duo of employment reports from the US - ADP report and the usual weekly jobless claims, would now be looked upon for some fresh impetus ahead of Friday's Chinese inflation figures and the keenly watched US monthly jobs data (NFP).

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair towards 0.7875-80 supply zone en-route the 0.7900 handle. On the flip side, retracement back below 0.7825 level now seems to drag the pair towards the 0.7800 handle en-route 100-day SMA support near the 0.7780-75 region.