AUD/USD hits 2-week tops, around 0.7135 region

   •  The USD continues to be weighed down by Powell’s cautious comments.
   •  US-China trade optimism underpinning Aussie and remained supportive.
   •  Technical buying above 0.7100 handle point to an extension of the up-move.

The AUD/USD pair pushed further beyond the 0.7100 handle and is currently placed at two-week tops, around the 0.7135 region. 

A combination of supporting factors assisted the pair to continue gaining positive traction for the third consecutive session and build on its sharp recovery move from the flash crash through to almost a decade low. 

With investors looking past blockbuster US monthly jobs report, the Fed Chair Jerome Powell’s cautious comments on Friday kept the US Dollar bulls on the defensive and was seen as one of the key factors driving the pair higher.

Speaking at the American Economics Association meeting in Atlanta, Powell stressed that the central bank wouldn’t push interest rates higher and fueled expectations of a possible pause to the Fed's policy tightening in 2019.

This coupled with the recent optimism over a comprehensive US-China trade deal further underpinned the China-proxy Australian Dollar and remained supportive of the ongoing positive momentum. 

The up-move at the start of a new trading week could also be attributed some follow-through technical buying following Friday's bullish breakthrough the 0.7070-75 supply zone and a sustained trade above the 0.7100 handle.

Hence, a subsequent up-move, towards testing its next resistance near mid-0.7100s, now looks a distinct possibility ahead of today's only scheduled release of the US ISM non-manufacturing PMI.

Technical levels to watch