• Fails ahead of the 0.7700 handle/200-DMA.
• Goodish pickup in the US bond yields weighing.
• Focus remains on the US tax reforms bill.
The AUD/USD pair was seen struggling to break through the key 0.7700 handle and trimmed some all of its early gains but has still managed to hold in positive territory for the second straight session.
With the US Dollar still weighed down by renewed concerns over the fate of a major US tax reform bill, a goodish pickup in the US Treasury bond yields seems to be the only factor keeping a lid on any additional gains for higher-yielding currencies - like the Aussie.
Meanwhile, a subdued action around commodity markets also did little to provide any fresh impetus to the commodity-linked Australian Dollar, with the pair failing to build on mixed Chinese inflation-led uptick back closer to the very important 200-day SMA.
Looking at the macro picture, the pair remains within a 2-week old trading range, and hence, it would be prudent to wait for a decisive break in either direction before positioning for the next leg of directional move.
The recent price action, however, points to consolidation phase below an important moving average. Hence, the outlook remains tilted to the downside and is being reinforced by the pair's inability to register any meaningful recovery from multi-month lows.
Technical levels to watch
Immediate support is seen near the 0.7660-55 zone and is followed by support near 0.7625 area and the 0.7600 handle. On the upside, the 0.7700 handle (200-day SMA) remains immediate strong hurdle, which if cleared might trigger a short-covering bounce towards the 0.7750-55 region.
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