AUD/USD struggling to build on early gains

The AUD/USD pair struggled to build on early gains and has reversed few pips from a three-day high level of 0.7572 level touched during Asian session on Tuesday.

Currently trading near 0.7560-55 region, the pair got an initial mild boost from NAB Business Confidence index and better-than-expected private sector credit growth. Moreover, news surrounding Trump’s move to restrict immigration from seven countries continued weighing on the US Dollar and supported the pair's up-move bid tone, amid a broad based retracement in the US treasury bond yields.

However, subdued price action in commodity space, especially weakness in Copper, extended little support to the commodity-linked currencies and failed to assist the pair to build on to early gains. Meanwhile, a modest greenback recovery, with the key US Dollar Index reversing daily losses and moving on the brink of breaking into positive territory, also contributed to the pair retracement from session high.

Later during the day, the US economic docket featuring the release of Chicago PMI and Conference Board’s Consumer Confidence Index for January would now be looked upon for short-term trading impetus ahead of Chinese manufacturing PMI print for January, scheduled for release during early Asian session on Wednesday. 

Technical levels to watch

A follow through retracement below 0.7540 level, leading to a subsequent break below 0.7530-25 support (yesterday's low), is likely to accelerate the slide towards the very important 200-day SMA support near 0.7500-0.7495 region ahead of 0.7475 horizontal support. 

On the upside, sustained move above 0.7570 area now seems to open room for continuation of the pair's near-term upward trajectory, even beyond 0.7600 handle, towards its next resistance near 0.7645-50 region.