AUD/USD headed back to 0.8060 support on USD rebound?

• DXY, USTs buying gathers steam in Asia.
• Corrective slide to extend?
• Focus shifts to the US data.

The bid tone around the US dollar keeps growing bigger in the Asian trades, now pushing the AUD/USD pair back below the 0.81 handle.

AUD/USD: Bears back in control

The Aussie is seen extending its retreat from the highest levels since May 2015 reached at 0.8136 last Friday, as markets look to take the profits off the table heading into a big week ahead. The macro calendar for this week remains heavy, with the Australian CPI report the main highlight alongside the FOMC decision and the US payrolls data.

Moreover, the spot came under fresh supply and surrendered the 0.81 handle, after the US dollar jumped back into the bids versus its main competitors, tracking the rally in Treasury yields, especially after the 10-year Treasury yields broke higher again to hit fresh 42-month tops. Higher Treasury yields usually dull the attractiveness of the AUD as an alternative higher-yielding asset.

However, the corrective slide appears to find some support near 5-DMA at 0.8080, as positive Asian equities combined with higher copper prices continue to keep the sentiment somewhat buoyed around the pair.

In the day ahead, the major will continue to track the USD dynamics amid a lack of fresh drivers until the US core PCE price index and personal spending releases.  

AUD/USD Technicals

Valeria Bednarik, Chief Analyst at FXStreet, notes: “In the 4 hours chart, the 20 SMA extended its advance below the current level, maintaining its bullish slope, while technical indicators ease within positive territory, not enough, however, to confirm a downward move ahead. A corrective movement could take place on a break below 0.8080, the immediate support, although renewed buying interest leading to an advance beyond 0.8130, will probably end in the pair nearing the 0.8200 figure. Support levels: 0.8080 0.8035 0.8000. Resistance levels: 0.8130 0.8160 0.8200.”