AUD/USD drops to 3-month lows, slides farther below 0.7700 handle
• USD underpinned by last week’s upbeat US economic data.
• Rising US bond yields add to the downward pressure.
• Investors brace for this week’s important event risks.
The AUD/USD pair remained heavily offered at the start of a new trading week and weakened further below the 0.7700 handle, to its lowest level since Dec. 21.
The US Dollar built on last week's strong rebound, supported by Friday's upbeat industrial production and consumer sentiment index, and continued exerting downward pressure on the major for the third consecutive session.
Adding to this, a goodish pickup in the US Treasury bond yields, amid growing prospects of more Fed rate hikes in 2018, further collaborated to the heavily offered tone surrounding higher-yielding currencies - like the Aussie.
Meanwhile, a weaker trading sentiment around commodity space, especially copper, also did little to lend any support to the commodity-linked Australian Dollar and stall the pair's downfall to three-month lows.
In absence of any major market moving economic releases, the USD/US bond yield dynamics might continue to act as an exclusive driver of the pair's momentum ahead of this week's key event risk - the highly anticipated FOMC meeting.
Technical levels to watch
Immediate support is pegged near 0.7665 horizontal level, below which the pair is likely to extend the slide towards 0.7635 intermediate level en-route the 0.7600 handle. On the upside, 0.7725-30 area now seems to act as an immediate resistance, which if cleared might trigger a short-covering move towards 0.7770 level before the pair aims back towards retesting 200-day SMA hurdle near the 0.7800 handle.