AUD/USD surrenders daily gains, US CPI eyed ahead of FOMC

   •  Fails ahead of 0.76 handle despite modest USD weakness.
   •  An uptick in US bond yields prompts fresh selling.
   •  US CPI/FOMC decision to provide directional impetus. 

The AUD/USD pair once again failed to move past the 0.7580 supply zone and has now surrendered majority of its daily gains. 

The pair’s latest leg of slide over the past hour or so could be solely attributed to a goodish pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies – like the Aussie.

Meanwhile, a Democrat candidate's victory in a US Senate seat in Alabama, which reduced the Republican's already narrow Senate majority, kept the sentiment around the US Dollar weak and helped limit further downside, at least for the time being.

Moving ahead, the key US CPI print for November, along with the US President Donald Trump's speech about tax reform at the Treasury Department would now be looked upon for some impetus ahead of today’s key event risk – the highly anticipated FOMC decision, due to be announced later during the NY trading session.

Technical levels to watch

A follow-through retracement below mid-0.7500s is likely to accelerate the fall towards 0.7525 level before the pair heads back towards challenging the key 0.75 psychological mark.

On the flip side, momentum beyond 0.7580 level is likely to confront resistance near the 0.7600 handle, above which a bout of short-covering could lift the pair towards 0.7645-50 supply zone.