AUD/USD reverses early gains, retreats back to 0.7550 level

The AUD/USD pair caught fresh bids at the start of a fresh trading week, amid broad based greenback weakness, and moved closer to Friday's two-month high.

The pair, however, lost its upside momentum during early European session and reversed early gains to currently trade around 0.7555 area. Lack of clarity over Trump's proposed fiscal stimulus triggered a broad based sell-off in the US treasury bond yields and drove flows away from the greenback towards higher-yielding currencies - like the Aussie.

Moreover, the prevalent upbeat sentiment around commodity space, especially Copper, also boosted demand for commodity linked currencies and collaborated to the pair's up-move on Monday. 

However, stalling greenback selling pressure, with the key US Dollar Index consolidating losses to four day low to the vicinity of 100.00 psychological mark, hindered further upside for the major. 

With an empty US economic docket, the pair would remain at the mercy of the price action around US treasury bond yields and broader market risk sentiment ahead of Australian CPI print during early Asian session on Wednesday. 

Technical levels to watch

A follow through retracement below 0.7550 support seems more likely to drag the pair immediately towards 0.7525 intermediate support before eventually taking it to the very important 200-day SMA resistance turned support near 0.7500 psychological mark. 

On the upside, sustained move above 0.7580 region now seems to pave way for a move beyond 0.7600 handle, towards its next major hurdle near 0.7650 area with some intermediate resistance near 0.7630 level.