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  • AUD/USD bounces as the US dollar drops with Treasury yields.
  • Gains in the S&P 500 futures also underpin the aussie dollar.
  • Dismal Chinese data could cap the gains ahead of US Retail Sales.

Fresh selling seen in the US dollar alongside the Treasury yields appears to put a fresh bid under AUD/USD, as the rates jump back above the 0.7150 barrier.

The spot consolidated below the latter almost through the Asian trades amid a cautious market mood, as disappointing Chinese activity numbers and resurgence of the coronavirus cases dampened appetite for riskier assets.

Heading into Europe, the greenback ran through fresh offers, as the Treasury yields retreat following the overnight advance led by weak US bond auction. The renewed strength in the S&P 500 futures also seem to bode well for the higher-yielding aussie.

From a short-term technical perspective, the uptick in the aussie can be associated with a breakthrough the critical resistance at 0.7155, the convergence of the 21, 50 and 100-hourly Simple Moving Averages (HMA).

The hourly RSI has jumped back above the midline into the bullish region, suggesting more room for upside. Therefore, the price could extend the advance to test the next powerful resistance at 0.7170, where the horizontal 200-HMA and falling trendline resistance meet.

To the downside, the daily low of 0.7133 could offer immediate cushion, below which the falling trendline support at 0.7129 will be put to test.

All eyes now remain on the US Retail Sales data and US-China trade talks for fresh trading impetus.

AUD/USD: Hourly Chart

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AUD/USD: Additional levels