• AUD/USD gains positive traction for the third straight day, albeit lacks follow-through.
• The unimpressive US NFP report keeps the USD bulls on the defensive and lends support.
• Bets for further tightening by the Fed limit the USD losses and cap the upside for the pair.

The AUD/USD pair attracts some buying for the third successive day on Monday and trades around the 0.6580 region during the Asian session. This marks the third straight day of a positive move and is sponsored by subdued US Dollar (USD) demand, though spot prices remain below Friday's swing high touched in reaction to the mixed US monthly employment details.

The Australian Dollar (AUD) continues to draw support from the Reserve Bank of Australia's hawkish quarterly Statement on Monetary Policy (SOMP) released on Friday, which indicated that interest rates may still need to go higher. Adding to this, Commerce Ministry announced that the country will lift the anti-dumping and anti-subsidy tariff on barley imports from Australia, which turns out to be another factor acting as a tailwind for the Aussie. The USD, on the other hand, remains on the defensive for the third successive day and turns out to be another factor lending some support to the AUD/USD pair.

The headline NFP showed that the US economy added 187K jobs in July, lower than the 200K estimates. Moreover, the readings for May and June were also revised down, suggesting that demand for workers was slowing. This, in turn, halted the recent surge in Treasury yields and is seen undermining the buck. That said, solid wage gains and a dip in the unemployment rate to 3.5% signalled continued tightness in the labour market. This, along with hopes for a soft economic landing, should allow the Federal Reserve (Fed) to keep rates higher for longer, which helps limit the USD losses and caps the AUD/USD pair.

Apart from this, a softer tone around the Asian equity markets, along with China's economic woes, further contributes to keeping a lid on the risk-sensitive Aussie and warrants caution for bulls. Traders now look to speeches by influential FOMC members for some impetus in the absence of any relevant market-moving economic data from the US on Monday. The fundamental backdrop, meanwhile, makes it prudent to wait for strong follow-through buying before positioning for an extension of the AUD/USD pair's recent recovery move from the vicinity of the 0.6500 mark, or a two-month low touched last Thursday