AUD/USD struggles to move past 200-DMA hurdle

   •  Fails near 200-DMA on weaker Chinese manufacturing PMI.
   •  Sliding US bond yields help limit losses.
   •  Focus remains on FOMC and NFP. 

The AUD/USD pair faced rejection at the very important 200-day SMA hurdle and dropped to an intraday low level of 0.7671, albeit has managed to recover few pips in the last hour. 

The pair stalled its modest recovery move from Friday's 3-1/2 month lows and failed just ahead of the 0.7700 handle following a slight miss on the Chinese manufacturing PMI print. The official manufacturing index came in at 51.6 for October, down from previous month's 52.4 and attracted some fresh selling around the China-proxy Australian Dollar. 

However, a follow through retracement in the US Treasury bond yields, led by speculations that the US President Donald Trump is likely to nominate Jerome Powell to be the next Fed Chair Janet Yellen, extended some support to the higher-yielding currency, Aussie, and helped limit deeper losses. 

Traders would now take cues from today's US economic data - Employment Cost Index, Chicago PMI and Conference Board's Consumer Confidence Index, ahead of Caixin Chinese Manufacturing PMI on Wednesday. 

The key focus, however, would remain on the FOMC decision and the keenly watched NFP, which would help investors determine the pair's next leg of directional move. 

Technical levels to watch

Immediate support is pegged near 0.7655 level, which if broken would turn the pair vulnerable to accelerate the slide towards 0.7625 level (multi-month lows) ahead of the 0.7600 handle. 

On the upside, the 0.7695-0.7700 region (200-day SMA) remains the immediate strong hurdle, above which a fresh bout of short-covering could lift the pair towards mid-0.7700s en-route the 0.7800 handle.