AUD/USD sits near 2-month tops, comfortably above mid-0.7200s

   •  The China-proxy Aussie gets a minor lift from slightly better Chinese PMI prints.
   •  Dovish Fed message continues to weigh on the USD and remained supportive.
   •  Traders now seemed to await the outcome of high-level US-China trade talks.

The AUD/USD pair held on to its positive tone through the early European session and is currently placed at near two-month tops, around 0.7265-70 region.

The pair continued gaining positive traction for the second straight session and was further supported by slightly better Chinese PMI prints. The official Chinese manufacturing PMI, though remained in contraction territory bettered estimates and came in at 49.5 for January, while non-manufacturing PMI jumped to 54.7, also beating estimates of 53.9. 

The data provided a minor lift to the China-proxy Australian Dollar and assisted the pair to build on the previous session's strong up-move led by a dovish message by the FOMC, clearly hinting that it is nearing the end of its recent policy tightening cycle and that its efforts to reduce the $4 trillion asset portfolio could end sooner than expected.

Despite a combination of supporting factors, the pair struggled for any strong follow-through as investors remained cautious and await the outcome of the highly anticipated US-China trade talks that began on Wednesday, where officials of the world's two largest economies are trying to reach a deal before the March 1st deadline. 

Apart from the US-China trade developments, the keenly watched US monthly jobs report (NFP), scheduled for release on Friday, will play an important role in determining the pair's next leg of a directional move. In the meantime, today's second-tier US economic data - initial weekly jobless claims and Chicago PMI, will still be looked upon for some short-term trading opportunities. 

Technical levels to watch