The AUD/USD pair's reversal from Friday's 8-day high extended on Monday and the pair touched a session low of 0.7580 before retracing few pips to currently trading around 0.7590-95 region.
The pair, on Monday, snapped three-days of winning streak and has now reversed part of Friday's strong gains led by upbeat Chinese inflation data. The greenback continues to gain traction as market participants now seemed convinced that the Fed would go ahead and raise interest rate, with the CME group's FedWatch Tool indicating 64% probability of such an action in December.
Moreover, a cautious investor sentiment around equity market is also denting demand for higher-yielding currencies – like Aussie, and exerting selling pressure around the major.
Later during NA trading session, US manufacturing data would provide immediate impetus for short-term traders ahead of RBA Governor Philip Lowe's speech and RBA's latest monetary policy meeting minutes during early Asian session on Tuesday.
Technical levels to watch
Immediate downside support is pegged at 0.7580 (session low) below which the pair seems to accelerate the slide immediately towards 100-day SMA support near 0.7540 region. On the upside, recovery back above 0.7600 handle might now confront resistance near 0.7615 level, which if cleared should now assist the pair to surpass 0.7645-50 horizontal resistance and aim towards 0.7685-90 resistance area.