AUD/USD: Recovery remains capped near 0.7175

• AUD bulls struggle to extend the recovery momentum.
• US dollar clings onto NFP-backed gains amid US fiscal impasse.
• US-China tensions, Australian jobs to remain in focus this week.

AUD/USD is looking to break the Asian consolidative phase to the upside, as the bulls target the 0.7200 barrier, taking cues from a broadly subdued US dollar and positive US stock futures.

The US dollar consolidates Friday’s recovery against its major peers, induced by the upbeat NFP data and US-China flare-up over the former banning Beijing’s tech titans.

Meanwhile, the S&P 500 futures trade with moderate gains, as US President Donald Trump’s coronavirus relief orders and slowing factory deflation in China lifted the market sentiment. The aussie draws support from the gains in the higher-yielding S&P 500 futures.

However, it remains to be seen if the spot could sustain the upside, as the looming US fiscal stimulus talks and US-China escalation could revive the recovery momentum in the US dollar.

On the data front, the US docket is light this Monday and therefore, the focus remains on the US CPI, Australian jobs data and US-China trade talks due later in the week ahead.

AUD/USD technical levels

The immediate upside will be tested at 0.7200 (round figure). The next resistance is aligned at 0.7244 (Aug 7 high). On the flip side, the immediate support is seen at 0.7150 (psychological level), below which the 20-DMA at 0.7124 could be tested.

AUD/USD additional levels