AUD/USD struggles near 2-month lows, bulls trying to defend 0.70 handle as focus shifts to NFP

   •  Disappointing Chinese trade balance figures exert some fresh downward pressure.
   •  A modest USD pull-back from fresh YTD tops helped limit any follow-through selling.
   •  Today’s key focus will remain on the closely watched US monthly jobs report – NFP.

The AUD/USD pair quickly reversed an Asian session uptick to 0.7030 area and is currently placed at the lower end of its daily trading range, or over two-month lows.

The pair met with some fresh supply remained on the defensive on Friday, also marking its seventh down day in the previous four, following the disappointing release of Chinese trade balance figures for the month of February.

In fact, China's trade surplus shrunk to $4.12 billion during the reported month, down from $39.16 billion surplus recorded in January, led by a sharp 16.6% y/y drop in exports and exerted pressure on the China-proxy Aussie.

The pair extended its recent rejection slide from the 0.7200 handle and dropped to the key 0.7000 psychological mark, albeit managed to find some support at lower levels amid a modest US Dollar pull-back.

The greenback trimmed a part of the overnight strong gains to fresh YTD tops, supported by dovish ECB-led slump in the shared currency, and was seen as one of the key factors lending some support to the major.

Moreover, investors also seemed reluctant to place aggressive bets and preferred to wait for today's key event risk - the release of the closely watched US monthly jobs report for February, popularly known as NFP.

The US economy is expected to have added 180K new jobs in February, down from 304K in the previous month, while the unemployment rate is anticipated to have ticked lower to 3.9% as against 4.0% in January.

Meanwhile, Average hourly earnings, which have gained traction in the recent past, are expected to have risen by 0.3% m/m and by 3.3% y/y and any positive surprise would be enough to give a fresh boost to the buck and exert some additional downward pressure on the already weaker Australian Dollar. 

Technical levels to watch