The AUD/USD pair once again failed to build on to its momentum above 0.7500 psychological mark and was rejected at 200-day SMA barrier.
Currently trading around 0.7460 region, testing session lows, the pair ran through fresh offers at higher level as investors seemed to unwind their bearish USD bets ahead of President-elect Donald Trump’s inauguration speech scheduled Jan. 20. In fact, the key US Dollar Index was seen flirting with highs near 101.70 level.
The pair even shrugged-off upbeat Australian MI inflation gauge and failed to clear the very important 200-day SMA barrier and extended its retracement from the vicinity of last week's 4-week high.
With the US markets closed in observance of Martin Luther King Day, the pair's movement on Monday will remain dependent on the overall US Dollar price dynamics and broader market risk sentiment. However, this week's key economic releases / events – including US inflation print and Australian employment details, would help investors determine the pair's next leg of directional move.
Technical levels to watch
Immediate support on the downside is pegged near 0.7450 region, which if broken has the potential to drag the pair back towards 50-day SMA support near 0.7410-0.7400 region ahead of 0.7380 strong horizontal support.
On the flip side, 0.7500 mark (200-day SMA region) remains immediate strong barrier, which if cleared decisively has the potential to lift the pair beyond Dec. highs resistance near 0.7520-25 region, towards testing its next major hurdle near 0.7560-65 region.
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