AUD/USD fails ahead of 0.76 handle, reverses majority of weekly bullish gap

The AUD/USD pair failed to build on the French election-led weekly bullish gap and reversed majority of early gains closer to the 0.7600 handle. 

Currently trading around mid-0.7500s, the major is being weighed down by a sharp up-surge in the US treasury bond yields. Renewed optimism over the US President Donald Trump's tax reform plans, due to be announced later this week, lifted the US treasury bond yields across all maturities and has been a key factor driving flows away from higher-yielding currencies - like the Aussie. 

   •  US: Tax plan to drive the markets – ANZ

Meanwhile, a fresh wave of global risk-on rally has been supportive of the positive sentiment surrounding commodity space and is extending some immediate support to commodity-linked currencies, including the Australian Dollar. 

   •  Asian stocks ex-China rally on French election relief

With global risk-on trade turning out as a key determinant of the pair's early movement, traders now look forward to a scheduled speech by Minneapolis Fed President Neel Kashkari for some impetus later during the NY session. However, key focus would be on the quarterly Australian CPI print, scheduled for release during early Asian session on Tuesday.

Technical levels to watch

A follow through retracement below 0.7540-35 immediate support could drag the pair back towards the key 0.75 psychological mark, below which the downslide could get extended towards 0.7475-70 horizontal support ahead of the next support near the 0.7430-25 region. 

Conversely, on a sustained move back above 0.7575 level the pair is likely to make a fresh attempt towards clearing the 0.7600 handle and aim towards testing 50-day SMA hurdle near the 0.7615-20 region.