• A subdued USD price action helped build on Friday’s post-NFP rebound from 2-month lows.
• Upbeat Jan. retail sales figures offset by a downward revision of the previous month’s readings.
• A goodish pickup in the US bond yields seemed to be the only factor capping any strong gains.
The AUD/USD pair held on to its mildly positive tone through the early North-American session, with bulls looking to extend the momentum further beyond mid-0.7000s.
After a modest weekly bearish gap opening, the pair managed to regain some positive traction for the second consecutive session and attempted to build on Friday’s post-NFP goodish bounce from over two-month tops amid a subdued US Dollar price action.
The greenback lost some additional ground following the release of delayed US monthly retail sales figure, which came in to show a larger than expected rebound in January but was largely offset by a further downward revision of the previous month’s already awful readings.
Despite the supporting factors, the pair lacked any strong bullish conviction amid a goodish pickup in the US Treasury bond yields, which against the backdrop of growing bets for an RBA rate cut kept a lid on any meaningful up-move for the Aussie.
Hence, it would be prudent to wait for a follow-through buying before confirming that the pair might have already formed a firm base near the key 0.70 psychological mark and positioning for any further near-term appreciating move.
Technical levels to watch
Immediate resistance is pegged near the 0.7085 horizontal level, above which the pair is likely to reclaim the 0.7100 handle and aim towards testing 50-day SMA hurdle near the 0.7130-35 region. On the flip side, the 0.7025 level now seems to protect the immediate downside and is closely followed by the 0.70 handle, which if broken should open the room for an extension of the recent rejection slide from the 0.7200 round figure mark.