AUD/USD fails ahead of 0.77 handle, slides to fresh session low

The AUD/USD pair failed to build on better-than-expected Caixin Chinese PMI-led up-move and failed just ahead of the 0.7700 handle.

The pair got a minor boost today's Chinese Caixin PMI print that showed the manufacturing activity returned to expansionary territory in June, which to some extent negated a larger-than-expected drop in Australian building permits. The private survey came in at 50.4, up from May's 11-month lows of 49.6 and marking a three-month high, and eventually extended some support to the China-proxy Australian Dollar.

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The up-move, however, lacked any strong follow through momentum amid a modest US Dollar recovery led by a continuous uptick in the US Treasury bond yields, which kept a lid on higher-yielding currencies - like the Aussie.

Adding to this, a mildly softer tone surrounding commodity space, especially copper, also did little to provide any additional boost to commodity-linked currencies, with the pair now flirting with lows near 0.7675 region.

With the US bond yield dynamics acting as an exclusive driver of the pair's movement at the start of a new week, traders now look forward to the release of ISM manufacturing index in order to grab some short-term trading opportunities.

Technical levels to watch

Weakness below 0.7665 level could get extended towards a strong resistance breakpoint now turned support near 0.7635-30 region. A follow through selling interest has the potential to drag the pair even beyond the 0.7600 handle, towards its next support near 0.7580-75 area.

On the flip side, any up-move might continue to face some fresh supply near the 0.7700 handle, which if cleared might trigger a fresh short-covering rally towards yearly tops resistance near mid-0.7700s touched in March.