“¢ Fails to capitalize on an early uptick, despite persistent USD weakness.
“¢ A goodish rebound in the US bond yields adds to the upside resistance.
“¢ Tuesday’s RBA monetary policy minutes to set to the near-term tone.
The AUD/USD pair extended its consolidative price-action and remained confined in a narrow trading range around mid-0.7500s, just below 2-week tops set on Friday.
A combination of diverging forces did little to provide any fresh impetus and assist the pair to build on last week’s goodish rebound from 11-month lows, and back above the key 0.7500 psychological mark.
A follow-through US Dollar profit-taking slide did provide an early boost at the start of a new trading week. The positive factors, to a larger extent, was negated by a sudden pickup in the US Treasury bond yields, which was now seen capping any additional gains for higher-yielding currencies – like the Aussie.
Adding to this, investors also seemed reluctant to place any aggressive bets ahead of Tuesday’s RBA monetary policy meeting minutes, which further contributed to the pair’s subdued price action through the mid-European session.
Ahead of the key release, the RBA Assistant Governor Guy Debelle’s scheduled speech, during the Asian session on Tuesday, might also provide some short-term trading opportunities.
Technical levels to watch
A follow-through buying beyond 0.7565 level has the potential to continue boosting the pair further towards reclaiming the 0.7600 handle en-route its next major hurdle near mid-0.7600s. On the flip side, weakness back below 0.7530 immediate support might now turn the pair vulnerable to slide back below the 0.7500 handle and head towards retesting 0.7470 strong horizontal support.
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