AUD/USD stuck in a range, just above 0.7400 handle

   “¢   Escalating US-China trade tensions weigh on the China-proxy Aussie.
   “¢   An uptick in the US bond yields revives USD demand and adds to the downward pressure.

The AUD/USD pair struggled to build on overnight modest rebound from sub-0.7400 level and seesawed between tepid gains/minor losses through the Asian session on Tuesday.

A weekend report that the US could restrict companies with at least 25% Chinese ownership to invest in US tech companies further fueled trade war concerns between the world’s two largest economies. With deep trade ties with Beijing, escalating US-China trade tensions exerted some fresh selling around the China-proxy Australian Dollar and was seen as one of the key factors weighing on the major at the start of a new trading week.  

The pair dropped to an intraday low level of 0.7396 but managed to rebound a bit amid persistent US Dollar selling bias. However, a modest uptick in the US Treasury bond yields helped the greenback to bounce off lows and contributed towards keeping a lid on any meaningful up-move for the major.  

Adding to this, the prevalent risk-off mood, which tends to drive flows away from perceived riskier currencies – like the Aussie, seems to have largely negated a mildly positive trading sentiment around commodity space, especially copper, and has eventually led to a range-bound/subdued price-action on Tuesday.

Moving ahead, today’s US economic docket, featuring the release of Conference Board’s consumer confidence index, and a scheduled speech by Atlanta Fed President Raphael Bostic will now be looked upon for some fresh impetus later during the North-American session.

Technical levels to watch

Any meaningful retracement slide below the 0.7400 handle is likely to find support near the 0.7370 level, below which the fall could further get extended back towards multi-month lows near the 0.7345 area.

On the flip side, the 0.7435-40 region now seems to have emerged as an immediate hurdle, which if cleared might assist the pair to aim back towards reclaiming the key 0.7500 psychological mark.