AUD/USD struggles to build on data-led recovery, still below 0.76 handle
• Aussie Capex data/Chinese PMIs provide some immediate respite.
• An uptick in US bond yields capping additional gains.
• US data and tax bill vote eyed for fresh impetus.
The AUD/USD pair held on to the upbeat Chinese PMI-led modest recovery gains but struggled to gain any strong follow-through traction.
Currently trading around the 0.7580 region, off session tops, the pair attracted some buying interest following the release of private capex data, coming in to show q-o-q growth of 1.0% for the third quarter. The positive release was accompanied by an upward revision of previous quarter's reading and provided a much-needed respite for the bulls.
Meanwhile, better-than-expected official Chinese manufacturing and services PMI prints were also seen lending support to the China-proxy Australian Dollar and helped the pair to snap four consecutive days of losing streak.
However, a subdued action around commodity space, especially copper, and a follow through a pickup in the US Treasury bond yields kept a lid on any additional gains for commodity-linked/higher-yielding currencies - like the Aussie.
Investors now look forward to the US economic docket, featuring the important releases of core PCE price index, personal income/spending data, along with the usual weekly jobless claims and Chicago PMI for some fresh impetus. The key focus, however, would be on the Senate vote on long-awaited US tax legislation, expected on Thursday.
Technical levels to watch
A follow-through momentum beyond the 0.7600 handle is likely to get extended towards the 0.7625-30 supply zone, above which a fresh bout of short-covering could lift the pair further towards mid-0.7600s en-route 200-day SMA hurdle near the 0.7695-0.7700 region.
On the flip side, mid-0.7500s remains an immediate strong support to defend, which if broken would turn the pair vulnerable to head towards testing the key 0.75 psychological mark before eventually dropping to its next support near the 0.7475-70 region.