AUD/USD stages minor recovery from nearly 5-month low

Having dropped to its lowest level since June 24, the AUD/USD pair staged a tepid recovery and has managed to defend 0.7300 handle for the time being.

Currently trading around 0.7335, the pair US Dollar extended its recent strong up-move led by growing expectations of aggressive fiscal stimulus by Trump administration, which has been driving inflation expectations and Treasury bond yields, eventually pushing the greenback higher since the outcome of US presidential election. Moreover, increasing bets for a December Fed rate-hike action continues to underpin the greenback and weighing on higher-yielding currencies. 

The pair, however, found some buying interest at lower levels amid rallying commodity prices, especially Copper, which tends to benefit commodity-linked currencies - like Aussie. 

With an empty US economic docket, the pair is likely to witness quiet trading session on Monday and consolidating its recent declines ahead of this week's key event risks - the release of durable goods orders and FOMC minutes from the US, scheduled on Wednesday. 

Technical levels to watch

Immediate upside resistance is pegged near 0.7360 level, which is closely followed by resistance near 0.7380 horizontal zone. Momentum above 0.7380 resistance could extend the recovery move beyond 0.7400 handle towards 0.7420 resistance ahead of its next major hurdle near 0.7450 region.

On the downside, sustained weakness below 0.7310 (session low), leading to a subsequent break below 0.7300 handle, is likely to turn the pair vulnerable to head towards 0.7230 support area before eventually dropping to test May lows support near 0.7150 region.