AUD/USD: bulls bouncing back towards psychological 0.77 handle

Currently, AUD/USD is trading at 0.7688, up 0.13% on the day, having posted a daily high at 0.7709 and low at 0.7663.

US Dollar tumbles to lows near 100.80

AUD/USD started off the week on a positive on the back of 10year US Treasury yields that had fallen their lowest levels since November on Friday, flirting with 2.3% as noted by analysts at Brown Brothers Harriman, who explained the speculation in markets that it will take time for easier fiscal policy to arrive in the US. On top of that, the Aussie was supported after Dec qtr profits saw a blockbuster jump of +20%/qtr. This can be explained by the strength in mining from strong commodity prices and bumps up nominal GDP.  "Inventories at +0.3% was slightly softer than expected but does not affect our GDP forecast (+0.6%/qtr ahead of tomorrow’s trade and govt sector updates).

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A busy week ahead for AUD/USD

For the week ahead, we have Aussie Dec current account deficit, net exports, Dec Govt spending, GDP, Feb PMI, Feb House prices, the January trade balance and Jan building approvals. We will also have Chinese Feb Manufacturing PMI, Feb non-manufacturing PMI, Feb Caixin manufacturing PMI and Feb Caixin non- manufacturing PMI.

AUD/USD levels

With a low at the 20 dma at 0.7663, AUD/USD struggled on the 0.77 handle and above the 50 sma on the 1hr sticks located at 0.7693. "Below the 20-day-ma we remain unable to rule out a 0.7595/15 retracement ahead of another upside attempt," explained analysts at Commerzbank. The 0.7778/.7850 2016 highs and the 38.2% retracement levels offer further resistance ahead.  Above 0.7850 would target the 200 month ma at 0.7930.