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AUD/USD sticks to RBA-led gains near 3-week tops

   •  Aussie retail sales/Chinese PMI triggers the initial leg of up-move.
   •  Slightly hawkish RBA statement provides an additional boost.
   •  Modest USD/US bond yields uptick capping further gains. 

The AUD/USD pair held on to its strong gains and now seems to have entered a bullish consolidation phase near 3-week tops. 

The AUD bulls got a double booster from today's better-than-expected economic data and not so dovish RBA monetary policy statement. The Aussie retail sales data bettered expectations, which along with better-than-expected Chinese services PMI extended some initial support to the China-proxy Australian Dollar. 

Adding to this, the RBA dropped its long-standing view that the Aussie was weighing on the inflationary outlook, pointing to a slightly more relaxed stance towards the currency and provided an additional boost to the pair's up-move.

However, a modest pickup in the US Dollar demand, backed by a renewed uptick in the US Treasury bond yields capped any additional gains for higher-yielding currencies, at least for the time being, with the pair stalling its up-move near mid-0.7600s.

Today's US economic docket features the release of trade balance data and ISM non-manufacturing PMI, which might provide some fresh impetus later during the NA session. In the meantime, broader market risk sentiment surrounding the greenback and the US bond yield dynamics would remain key determinants of the pair's momentum.

Technical levels to watch

Immediate support is now pegged near the 0.7625-20 region, below which the pair could drift back towards the 0.7600 handle bef0re sliding further towards 0.7580-75 horizontal support.

On the flip side, sustained momentum beyond mid-0.7600s now seems to trigger a fresh bout of short-covering and assist the pair to head back towards retesting the very important 200-day SMA hurdle near the 0.7695-0.7700 region.
 

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