AUD/USD surrenders early modest gains closer to weekly tops, but holds above 0.7100 mark

   •  A modest pickup in the USD demand exerts some pressure at higher levels. 
   •  US-China trade optimism helped limit deeper losses, at least for the time being.
   •  The market focus remains glued to Friday’s release of the keenly watched NFP.

The AUD/USD pair lacked any firm direction and seesawed between tepid gains/minor losses through the mid-European session on Thursday.

The pair failed to capitalize on the overnight strong rebound from near three-week lows, triggered by fresh optimism over progress in the US-China trade talks and remained capped below the 0.7130 supply zone, or weekly tops.

Wednesday's disappointing ADP report added to concerns over slowing US economic growth, which led to a slight deterioration in risk sentiment and kept a lid on any strong gains for perceived riskier currencies - like the Aussie. 

This coupled with a modest pickup in the US Dollar demand exerted some additional downward pressure and dragged the major to fresh session lows, around the 0.7100 handle during the early European session.

The downside, however, remained cushioned as investors now seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of this week's key event risk - the closely watched US monthly jobs report (NFP).

In the meantime, the broader market risk sentiment and the USD price dynamics might play a key role in influencing the pair's momentum amid absent relevant market moving economic releases on Thursday.

Technical levels to watch

A sustained weakness back below the 0.7100 handle might accelerate the slide towards the 0.7070 intermediate support en-route mid-0.7000s before the pair eventually aims to challenge the key 0.70 psychological mark. 

On the flip side, the 0.7125-30 region might continue to act as an immediate hurdle, above which a fresh bout of short-covering could lift the pair further towards the 0.7165-70 supply zone ahead of the 0.7200 handle.