AUD/USD clings to modest gains but lacks follow-through, US GDP in focus

   •  Subdued USD/US bond yields help to recover a part of the overnight slump.
   •  Positive copper prices provide an additional support and remain supportive.
   •  Traders seemed reluctant to place aggressive bets ahead of US GDP print.

The AUD/USD pair caught some bids on Friday and managed to recover a part of previous session's steep decline, albeit lacked any strong follow-through. 

A strong upsurge in the US Treasury bond yields helped the US Dollar to stage a solid rebound on Thursday and prompted some aggressive selling around the major. The pair retreated sharply, losing over 90-pips from two-week tops, and failed to gain any respite from disappointing US macro releases - durable goods orders, trade balance data and initial weekly jobless claims. 

The USD recovery move paused during the Asian session, amid a consolidative price action surrounding the US bond yields, and was seen as one of the key factors extending some support to the major on the last trading day of the week. 

This coupled with a mildly positive tone around copper prices, which tend to underpin demand for commodity-linked currencies, and better-than-expected Aussie producer price index (PPI) provided a minor boost to the Australian Dollar. 

The uptick, however, lacked conviction and the pair remained capped below the 0.7400 handle as traders seemed reluctant to place any aggressive bets ahead of the advance US Q2 GDP growth figures, anticipated to show that the US economy expanded by 4.1% in the three months to June.

Technical levels to watch

Momentum back above the 0.7400 handle seems to confront immediate resistance near 0.7420 horizontal level, above which the pair is likely to head back towards challenging the 0.7460-65 supply zone. 

On the flip side, 0.7360 area might protect the immediate downside, which if broken might turn the pair vulnerable to head back towards testing YTD lows, around the 0.7310 region.