AUD/USD recovers to 0.7030 area ahead of US NFP data

• Chinese data revealed the impact of the U.S. tariffs on Friday.
• US Dollar Index consolidates yesterday's gains.
• Nonfarm payrolls in the U.S. is expected to increase by 180K in February.

Pressured by the broad-based USD strength and disappointing macroeconomic data releases from China, the AUD/USD pair tested the 0.70 mark for the first time since the first week of January. However, with markets going into a consolidation phase ahead of the critical NFP data from the U.S., the pair staged a modest recovery and was last seen trading at 0.7030, adding 0.25% on a daily basis.

Earlier in the Asian session, China reported that the trade surplus narrowed to $4.12 billion in February from $39.16 billion in January amid a more-than-20% decline seen in exports and the data revealed the negative impact of the U.S. tariffs on the Chinese economy. 

On the other hand, after surging to its highest level since mid-November at 97.71, the US Dollar Index is making a technical correction on Friday and loses 0.15% on the day at 97.45. The next significant impetus on the greenback's market valuation will be the February NFP report. Previewing the data, "Following two consecutive reports with 300k+ prints for December and January, we look for payrolls to mean revert to 190k in February. In particular, we see scope for softness in the construction and in the leisure/ hospitality sectors given recent above-average strength in hiring,” TD Securities analysts said.

• US NFP Preview: 5 Major Banks expectations from February payrolls report.

Technical levels to consider

With a daily close below 0.7000 (daily low/psychological level), the pair could extend its slide toward 0.6920 (Jan. 3 low) and 0.6775 (Jan. 2 flash crash low). On the upside, resistances are located at 0.7050 (Mar. 7 high), 0.7090 (Mar. 6 high) and 0.7145 (50-DMA).