AUD/USD rebounds from 2-week low, lacks follow-through

The AUD/USD pair staged a modest rebound from over two-week lows, albeit seemed struggling to extend the momentum further beyond mid-0.6800s.
 
The pair stalled its recent pullback and managed to find some support near the 0.6830 in reaction to a strong rebound in the Westpac Consumer Confidence Index, which rose to +4.5% in November as compared to -5.5% recorded in the previous month.

Upside remains limited

Upbeat consumer data helped offset a slight disappointment from Australia’s third-quarter (Q3) Wage Price Index, which slipped to 2.2% YoY rate from 2.3% previous. On a quarterly basis, the index matched consensus estimates and held steady at 0.5%.
 
The uptick, however, lacked any strong bullish conviction amid the prevalent risk-off mood. This coupled with renewed US-China trade uncertainty further collaborate towards capping any runaway rally for the China-proxy Australian Dollar.
 
It is worth recalling that the US President Donald Trump indicated over the weekend that he would only sign if it was the “right deal” for America. Trump on Tuesday further added that the US will increase tariffs on China if the first step of a broader agreement isn’t reached.
 
Hence, it will be prudent to wait for some follow-through buying before confirming that the pair recent pullback from the 0.6930 supply zone is over and positioning for any further near-term appreciating move ahead of the latest US consumer inflation figures.
 
Apart from the US CPI print, Wednesday's key focus will be on the Fed Chair Jerome Powell's testimony, which might play a key role in influencing the near-term USD price dynamics and help determine the pair's next leg of a directional move.

Technical levels to watch