AUD/USD defies USD weakness, sits at session lows ahead of US data

   •  Weaker Chinese import data prompts some profit-taking.
   •  Surging US bond yields add to the downward pressure.
   •  US macro data – CPI, monthly retail sales, eyed for fresh impetus.

The AUD/USD pair extended its steady decline from over 3-month tops and is currently placed at the lower end of its daily trading range, around the 0.7870 region.

The pair defied broad-based US Dollar weakness and held on to its offered tone through the early NA session. Today's disappointing Chinese import figures, which led to a larger-than-expected surplus of $54.69 billion, was seen as one of the key factors weighing on the China-proxy Australian Dollar.

Adding to this, a goodish pickup in the US Treasury bond yields, which tends to undermine demand for higher-yielding currencies further collaborated to the pair's profit-taking slide from the 0.7900 round figure mark. 

Meanwhile, a mixed trading sentiment around commodity space, with a modest uptick in gold being offset by weaker copper, did little to lend any support and revive demand for the commodity-linked Aussie. 

Investors now look forward to the latest inflation figures and monthly retail sales data from the US for some fresh trading impetus, ahead of another Chinese data dump slated for release next week. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “Technically, the 4 hours chart shows that the price holds above a directionless 20 SMA, while technical indicators ease within positive territory, far from indicating an upcoming slide but clearly indicating limited buying interest. Despite briefly surpassing October's high, the upside continues to be limited by the 0.7900 price zone. Dollar's selling may resume if upcoming US retail sales and inflation figures miss expectations, sending the pair then closer to the 0.8000 threshold.”

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