AUD/USD gains traction further beyond 0.78 handle, fresh 2-month tops

   •  No respite for the USD bulls on the last trading day of 2017.
   •  Weaker US bond yields add to USD woes and provide an additional boost. 
   •  Technically remains poised to extend the bullish run-up.

The AUD/USD pair finally broke out of its Asian/early European session consolidation phase and touched a fresh two-month high level of 0.7822 in the last hour.

Against the backdrop of persistent US Dollar selling bias, a modest downtick in the US Treasury bond yields provided an additional boost to higher-yielding currencies - like Aussie and assisted the pair to build on its momentum beyond the 0.7800 handle.  

A combination of supporting factors and bullish technical set-up now seems to have increased the prospects for an extension of the pair's bullish trajectory, amid relatively thin liquidity conditions and absent US economic releases. 

As Valeria Bednarik, American Chief Analyst at FXStreet writes: "The pair advanced further above the 61.8% retracement of the October/December decline, the immediate support at 0.7745, broken on Wednesday, favoring further gains ahead, towards October high of 0.7896".

Meanwhile, the market seems to have largely ignored a mildly softer tone around commodity space, which tends to undermine demand for the commodity-linked Australian Dollar, with the prevailing strong bearish sentiment surrounding the greenback and weaker US bond yields turning out to be key determinants of the pair's momentum to its highest level since Oct. 24.

Technical levels to watch

Immediate resistance is pegged near the 0.7840-45 area, above which the pair all set to aim towards testing 0.7875-80 hurdle before eventually darting towards the 0.7900 handle. 

On the flip side, 0.7800-0.7790 zone now seems to have emerged as an immediate support, which if broken might trigger a corrective slide towards 0.7765 horizontal level en-route 0.7730 and the 0.7700 handle.