AUD/USD fills a major part of the weekly bearish gap amid notable USD supply

   •  Investors looked past the recent escalation of US-China trade spat.
   •  Renewed USD selling pressure helped recover early lost ground.

The AUD/USD pair remained confined within 25-30 pips broader trading range and is currently placed at the top end of its daily trading range, around the 0.7275-80 region. 

News that China cancelled its planned trade talks with the US weighed on the China-proxy Australian Dollar and was seen as one of the key factors behind the pair's weekly bearish gap opening, especially after Friday's rejection near 50-day SMA hurdle, around the 0.7300 handle.

However, a fresh wave of greenback selling pressure, despite a follow-through upsurge in the US Treasury bond yields, helped limit further downside. In fact, the key US Dollar Index dropped back closer to near three-month lows and provided a minor lift to the major. 

Meanwhile, a subdued action around commodity space, especially copper, did little to influence commodity-linked currencies - like the Aussie, with a combination of diverging forces failing to provide any meaningful impetus and leading to a subdued price action through the early North-American session on Monday.

Technical levels to watch

Any subsequent up-move might continue to confront stiff resistance near the 0.7300 handle, above which a fresh bout of short-covering could further lift the pair towards testing the 0.7365-70 supply zone.

On the flip side, mid-0.7200s now seems to have emerged as an immediate support, which if broken might turn the pair vulnerable to accelerate the slide further towards retesting the 0.7200 round figure mark.