AUD/USD sticks to modest gains, just above 0.7600 handle

Haresh Menghani FXStreet

• Fails to benefit from the latest Chinese inflation figures released over the weekend.
• Rising trade tensions keep the USD on the back-foot and helps regain some traction.
• This week’s FOMC monetary policy update should determine the near-term trend.

The AUD/USD pair has managed to rebound around 20-pips from early Asian session lows, albeit lacked any strong follow-through beyond the 0.7600 handle.

The pair struggled to build on Friday's rebound from multi-day lows and failed to benefit from hotter than expected Chinese inflation figures, released over the weekend. Even a subdued US Dollar demand, amid rising trade tensions following the G-7 debacle also did little to provide any fresh bullish impetus to the major.

Traders seemed to track a goodish pickup in the US Treasury bond yields, with a weaker tone around copper prices further collaborating towards keeping a lid on any meaningful up-move for the commodity-linked Australian Dollar.

Meanwhile, investors also seemed reluctant to place any aggressive bets ahead of this week's key event risk - the latest FOMC monetary policy decision. The Fed is widely expected to raise interest rates again and hence, the key focus would be on the updated economic projections, which should help determine the pair's next leg of directional move.

Technical levels to watch

Immediate resistance is pegged near the 0.7620-25 area, above which the pair is likely to head back towards challenging 100-day SMA barrier near the 0.7665-70 region. On the flip side, weakness below 0.7575-70 immediate support now seems to pave the way for an extension of the pair's downfall back towards retesting the key 0.7500 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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