AUD/USD stays in the negative territory near 0.7280 as DXY sticks to gains above 94

• USD recovery in the NA session weighs on AUD/USD.
• The pair remains on track to close the second straight week higher.
• Markit data shows robust expansion in the manufacturing sector.

After rising above the 0.73 mark for the first time in three weeks on Friday, the AUD/USD pair reversed its course in the American trading hours and set its daily low at 0.7264 before recovering a small part of its losses. At the moment, the pair is trading at 0.7280, down 0.18% on the day.

In the absence of significant macroeconomic data releases from Australia on Friday, the greenback's market valuation remained the primary driver of the pair's price action. On the back of a sharp drop seen in the GBP/USD pair, the US Dollar Index broke above the 94 handle and now remains on track to close the day with modest gains above 94.20.

Today's data from the U.S. showed that the business activity in the manufacturing sector expanded at a stronger pace than expected in September with the Markit PMI data improving to 55.6 from 54.7. On a negative note, the Service PMI dropped to 52.6 from 54.8 and missed the market expectation of 55.

With an empty economic calendar in the remainder of the session, the pair is likely to stay in its recent range. Despite today's retreat, the pair remains on track to close the week around 140 pips higher.

Technical levels to consider

The initial resistance for the pair aligns at 0.7300/05 (psychological level/daily high) ahead of 0.7370 (100-DMA) and 0.7450 (Aug. 9 high). On the downside, supports are located at 0.7260 (50-DMA), 0.7180 (20-DMA) and 0.7140 (Sep. 18 low).