AUD/USD rallies further beyond 0.7100 handle, refreshes session tops

   •  Reports of progress in the US-China trade talks prompt some aggressive short-covering move.
   •  The prevalent risk-on mood/renewed USD weakness remained supportive of the momentum.
   •  Traders now eye US ADP report and ISM non-manufacturing PMI for some fresh impetus.

The AUD/USD pair built on its strong intraday positive move and climbed further beyond the 0.7100 handle, recovering the previous session's slump to near three-week lows. 

Reports that the US and China are moving closer to a trade deal turned out to be one of the key factors underpinning the China-proxy Australian Dollar and prompted some aggressive short-covering move around the major.

The pair quickly reversed an early Asian session dip to the 0.7055 region after the Financial Times reported that the top US and Chinese officials have resolved most of the issues blocking the long-awaited trade deal.

The latest optimism over progress in the US-China trade talks provided a strong boost to the global risk sentiment and further collaborated towards driving flows towards perceived riskier currency - Aussie.

Adding to this, some renewed US Dollar selling bias, despite the risk-on mood-led upsurge in the US Treasury bond yields, remained supportive of the pair's ongoing strong positive momentum back above the 0.7100 mark.

Moving ahead, today's US economic docket - highlighting the release of ADP report on the US private sector employment and ISM non-manufacturing PMI, will now be looked upon for some fresh impetus.

The key focus, however, will remain on Friday's closely watched US monthly jobs report - popularly known as NFP, which will play an important role in determining the pair's next leg of a directional move. 

Technical levels to watch