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The old and paternalistic Holy Roman Empire is torn by the rivalry between the Habsburgs and the Hohenzollerns and they will try to unite the German Empire and bring it under their hegemonies Austria and Prussia are not likely to let another Polish-Saxon union happen and any ties with the Polish kingdom threaten Saxony's sovereignty so keeping a balance is essential Although you are in an alliance with Prussia, having a decent standing army would prove useful not to mention the danger of another war with the Habsburgs Crisis in Europe and France's inability to take any action have only encouraged Joseph II in his ambitions. Try allying yourself with protestant states like Hanover and Hesse-Kassel first, Bavaria is more probable to go in an alliance with Austria. Forming alliances with other German states is indispensable and should be your primary strategy.

Catherine the Great's influence in the HRE is considerable so flattering the Russian Tsarina might have its conveniences and help preserve Saxony's independence.

The Electorate's power does not lie in size and military strength but in diplomacy. With the advantage of being an intermediary, you will have the opportunity to build your economy. Maintaining trade with other German states and picking the right ministers will bring prosperity. You still have resources collected after the Treaty of Teschen which ended the War of the Bavarian Succession, and how you invest those funds will determine Saxony's status.

Do not forget to pay attention to the risings in France, it is hard to tell what will come out of it but one thing is for certain: Europe is not ready for changes and any revolution coming from France will immediately be opposed by all other European monarchies and will bring them in a closeness never seen before.

Here is the Austrian army:

Austrian army unit icons