AUD/USD struggling near multi-month lows
• Weighed down by resurgent USD demand.
• Fails to benefit from sliding US bond yields.
• Focus shifts to Tuesday’s Chinese macro data.
The AUD/USD pair came under some renewed selling pressure and quickly retreated around 20-25 pips from session tops near the 0.7665 region.
With investors looking past the latest disappointment over the US tax reform plan, resurgent US Dollar demand, primarily led by UK political headlines-led selloff in the British Pound, has been one of the key factors weighing on the major.
Meanwhile, a sharp retracement in the US Treasury bond yields, which tends to benefit higher-yielding currencies, did little to stall the pair's retracement over the past hour or so, back closer to the recent multi-month lows.
The market also seems to have largely ignored a mildly positive trading sentiment around commodity space, with the USD price dynamics acting as an exclusive driver of the pair's movement at the start of a new trading week.
It would now be interesting to see if the pair continues to find some support near the 0.7630 region amid empty US economic docket and as focus shifts to Chinese data dump, which should provide fresh impetus to the China-proxy Australian Dollar.
• China: Economic growth expected to slow down - BNPP
Technical levels to watch
A follow through weakness below the mentioned support is likely to accelerate the fall towards the 0.7600 handle en-route 0.7580-75 strong support. On the upside, any up-move beyond 0.7665-70 area might continue to confront fresh supply near the 0.7690-0.7700 region, which if cleared might trigger a short-covering bounce towards mid-0.7700s.