AUD/USD faces rejection near 0.7600 handle, Fedspeaks and US ISM PMI in focus
• Quickly retreats around 30-pips from session tops.
• Risk aversion favors USD against AUD.
• Near-term outlook remains bearish.
The AUD/USD pair faded early European session bullish spike to the 0.7600 neighborhood and has now surrendered a major part of its daily gains.
The pair had a good two-way move on Friday and remained within striking distance of last week's multi-month lows. The latest leg of sharp retracement, of around 30-35 pips from session tops, could be solely attributed to a modest pickup in the US Dollar demand.
With investors still digesting the latest US tax bill chaos, global flight to safety was seen driving flows away from perceived riskier currencies and dragged the pair back to the 0.7570 region.
Meanwhile, a sharp retracement in the US Treasury bond yields did little to lend any support to the higher-yielding currency, albeit a mildly positive trading sentiment around commodity space helped limit deeper losses, at least for the time being.
Next in focus would be the release of US ISM manufacturing PMI, which along with Fedspeaks would be looked upon for some fresh trading opportunities on the last trading day of the week.
Valeria Bednarik, American Chief Analyst at FXStreet writes: "The short-term picture continues to favor the downside, as the price is unable to regain ground above a bearish 20 SMA, while technical indicators remain within bearish territory, albeit lacking clear directional strength."