AUD/USD rebounds from 3-week lows, looks to reclaim 0.74 mark

The AUD/USD pair staged a modest recovery and recovered part of previous session's slump to its lowest level since May 12.

On Thursday, the pair came under intense selling pressure in wake of a shocking contraction in Chinese manufacturing activity, for the first in twelve months. This coupled with impressive ADP report on the US private sector employment and a modest improvement in the US ISM manufacturing PMI provided an additional boost to the US Dollar and collaborated to the pair's sharp slide to three-week lows.

The Aussie bulls, however, seemed to have found some respite from today's release of New Home Sales data from Australia. The Housing Industry Association reported a 0.8% m-o-m rise in new homes sales, posting a strong rebound from 1.1% fall seen in March and helped the pair to register a modest recovery. 

The pair now looks to reclaim the 0.7400 handle ahead of the much anticipated monthly jobs report from the US (NFP), which would influence Fed rate-hike expectations and eventually provide some fresh impetus for higher-yielding currencies - like the Aussie.

Technical levels to watch

A follow through buying interest beyond the 0.7400 handle could extend the recovery move towards 0.7425-30 resistance area, above which a fresh bout of short-covering has the potential to lift the pair towards weekly high resistance near 0.7465-75 region. 

On the flip side, 0.7375-70 area now becomes immediate support to defend, which if broken would accelerate the slide towards 0.7335-30 support area (May monthly low) before the pair eventually drops to its next important support near 0.7300-0.7295 region.