The AUD/USD pair tested the 0.72 level for the first time since mid-December on Thursday but struggled to break above that level as the greenback started to erased yesterday's losses. As of writing, the pair was up 0.25% on the day at 0.7190.

Earlier in the day, China's commerce ministry in a statement explained that the trade talks with the U.S. lasted longer than planned because both sides were serious and honest. "Structural issues such as forced tech transfer, IP rights have made progress," the statement further read, helping the trade-sensitive AUD preserve its strength against its peers.

However, with the US Dollar Index reversing its sharp drop that was triggered by dovish Fed commentary late Wednesday, the pair failed to climb higher and now moves sideways in a tight band below the 0.72 handle. Now markets are waiting for FOMC Chairman Powell, who last week said that the Fed was prepared to shift its policy stance if needed while adding that they would use all tools as appropriate in a future crisis, to deliver his speech.

In the early trading hours of the Asian session, the AiG's Performance of Construction Index from Australia will be released but this report is unlikely to receive a significant market reaction.