AUD/USD clings to recovery gains beyond 0.7200 handle

The AUD/USD pair staged a goodish recovery on Tuesday and is now seen building on to its move back above 0.7200 handle.

Currently trading around 0.7210 region, having posted a session high at 0.7220 level, the pair gained some traction amid mild greenback pull-back and broad based retracement in the US treasury bond yields. This coupled with the prevalent risk-on sentiment around equity market, is further supporting the bid tone surrounding higher-yielding currencies - like the Aussie. 

Meanwhile, Tuesday upbeat US consumer confidence index, which rose to its highest level since August 2001 and reinforced Trump-led optimistic view for the US economy, might continue to underpin the US Dollar and might hinder the pair's recovery from seven-month lows, touched last week. 

With a relatively thin US economic docket, featuring the only release of pending home sales data, the pair remains at the mercy of broader market risk sentiment and the US Dollar trend. 

Technical levels to watch

A follow through buying interest above session peak resistance near 0.7220 area has the potential to lift the pair towards 0.7260-65 strong hurdle. On the downside, weakness back below 0.7200 handle, leading to a subsequent drop below 0.7170 support, seems to drag the pair back towards 0.7150-45 region and opens room for continuation of the pair's near-term downward trajectory.