• Chinese PPI helps offset a modest pickup in the US bond yields.
• Concerns over US tax bill remains supportive of the up-move.
The AUD/USD pair built on previous session's strong up-move and has now moved back closer to the very important 200-day SMA immediate strong hurdle.
Currently trading around 0.7690 level, testing session tops, the pair extended overnight rebound from multi-month lows support and got an additional boost from today's better-than-expected Chinese PPI print for October.
China’s Producer Price Index arrived at 6.9% y-o-y (6.6% expected) and helped offset softer headline CPI print, coming in at 0.1%, as compared to 0.2% anticipated and 0.5% last, which eventually underpinned the China-proxy Australian Dollar.
Meanwhile, mounting uncertainty over the US tax reforms plan kept the US Dollar bulls on the defensive and remained supportive of the pair's up-move through the early European session. The long-awaited US tax bill would remain in focus as investors brace for the release of the legislation text, expected to be revealed later on Thursday.
It, however, remains to be seen if bulls can maintain their dominant position or the pair once again meets with some fresh supply near the 0.7700 handle amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.
Technical levels to watch
Immediate upside hurdle remains near the 0.7700 handle, above which a fresh bout of short-covering is likely to accelerate the up-move towards 0.7730 level ahead of 0.7750-55 resistance.
On the downside, 0.7655 level now becomes immediate support, which if broken could drag the pair back towards 0.7625 horizontal support en-route the 0.7600 handle and 0.7580-75 zone.
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