AUD/USD slides back closer to 2-1/2 month lows touched last week

Having posted a session high near mid-0.7800s, the AUD/USD pair ran through some fresh offers and drifted back closer to 2-1/2 month lows touched last week. 

The market seemed convinced that the Fed would move towards raising interest rates in December, reinforced by continuous upsurge in the US Treasury bond yields, was seen driving flows away from higher-yielding currencies - like the Aussie.

Adding to this, renewed optimism over the US tax reform underpinned the US Dollar demand and further collaborated to the pair's slide through early European session on Monday. 

Even a mildly positive trading sentiment around copper prices did little to lend any support to the commodity-linked currency and stall the pair's fall to session lows near the 0.7815-10 region.

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Today's US economic docket highlights the release of ISM manufacturing PMI print for September and would now be looked upon for some fresh impetus.

Technical levels to watch

Immediate support remains near the 0.7800 handle, which if broken is likely to accelerate the fall towards 100-day SMA support near the 0.7770-65 region. On the upside, momentum back above 0.7830 level might continue to confront fresh supply near mid-0.7800s, above which a bout of short-covering could lift the pair back towards the 0.7890-0.7900 important hurdle.