AUD/USD flirting with lows ahead of US data

Having failed to build on Monday's bullish gap, the AUD/USD pair came under some renewed selling pressure on Tuesday and has now eroded all of its gains recorded in the past couple of trading sessions.

Currently trading around 0.7530-25 band, the pair's downslide could be attributed to surging US treasury bond yields. Higher yields tend to underpin the US Dollar demand and drive flows away from higher-yielding currencies - like the Aussie. 

The pair extended previous session's reversal move from multi-day tops despite of the prevalent risk-on mood led by yesterday's results from the first round of the French Presidential elections. Meanwhile, the pair even shrugged off positive trading sentiment surrounding commodity space, especially copper, which tends to boost demand for commodity-linked currencies, with the US yield dynamics acting as an exclusive driver of the pair's movement on Tuesday. 

With today's slide, the pair has now snapped three consecutive days of winning streak and is now pushing closer towards the key 0.75 psychological mark as traders now look forward to the US economic docket for some fresh trading impetus.

However, this week's key macro data, including Wednesday's Australian Q1 inflation figures and US Q1 GDP print, are likely to act as the next big fundamental triggers for the pair's next leg of diretional move.

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Investors will also keep a close watch on developments surrounding the US debt ceiling and the US President Donald Trump's promised "massive tax cut" plans, expected to be unveiled this week. 

Technical outlook

Jason Sen, Director at DayTradeIdeas.com writes, "AUDUSD first resistance at 7575/80 & again stop above 7600, although it is only above last week's high at 7610 that bulls are back in control to target minor resistance at 7640/45. If we continue higher look for 7675/78."

"Failure to hold above 7575 risks a retest of first support at 7545/40 & probably the best chance of a low for the day. Longs need stops below 7520 but further losses target 7500 before the 7475/70 April low" he added.