AUD/USD building on sharp recovery move, hits fresh multi-day tops

The AUD/USD pair built on to its strong short-covering bounce further beyond the key 0.75 psychological mark and jumped to fresh multi-day tops near 0.7530-35 band. 

The pair caught fresh bids after yet another disappointment from the US economic data that showed easing inflationary pressure and dismal personal income and spending growth. The Fed's preferred Core PCE Price Index dropped 0.1% on a monthly basis, taking the yearly rate to 1.6% during March from 1.8% reported in the previous month. 

Adding to this, personal income recorded a tepid growth of 0.2% (0.3% expected) and February's growth was also lowered to 0.3% from 0.4% reported earlier. Meanwhile, personal spending remained flat on a monthly basis and also fell short of consensus estimates pointing to a growth of 0.2%. 

   •  US: Personal income increased $40.0 billion (0.2%) in March

The incoming US economic data continued to point towards a possible phase of economic slowdown and attracted some fresh selling pressure around the greenback, with the key US Dollar Index reversing all of its early gains and now drifting into negative territory. 

Meanwhile, possibilities of some short-covering ahead of tomorrow's RBA meeting and Chinese Manufacturing PMI further aggravated the move and helped the pair to reverse around 50% of last week's in a single trading session on Monday. 

Today's US economic docket also features the release of ISM Manufacturing PMI, which is expected to ease from March's 57.2 to 56.5 in April.

Technical levels to watch

Momentum beyond 0.7540 level is likely to get extended towards the very important 200-day SMA hurdle near 0.7555 area ahead of 50-day SMA hurdle near 0.7590-95 region.

On the flip side, 0.7500-0.7490 area now seems to protect immediate downside, which if broken would turn the pair vulnerable to head back towards 0.7460-55 horizontal support before eventually heading towards the 0.7400 handle.