AUD/USD clings to moderate gains just below mid-0.7900s ahead of US data

The AUD/USD pair caught some fresh bids near the 0.7900 handle but lacked any strong follow through momentum and remained capped below mid-0.7900s.

Currently trading around the 0.7935 region, the pair held onto some minor gains for the second consecutive session and was seen benefitting from strong gains in commodity prices, especially copper. Moreover, a subdued greenback action, with the key US Dollar Index languishing near 13-month lows remained supportive of the bid tone surrounding the major.

However, a sharp recovery in the US Treasury bond yields, which collaborated towards limiting further USD weakness, was seen keeping a lid on further up-move for higher-yielding currencies - like the Aussie.

Moreover, traders also seemed reluctant to place aggressive bets ahead of the quarterly Australian CPI print and RBA Governor Philip Lowe's speech during early Asian session on Wednesday. 

   •  Australia: Headline CPI expected at 0.6%qtr - Westpac

Next on tap would be the release of CB's Consumer Confidence Index from the US, which is likely to be overshadowed by repositioning trade ahead of the key event risk - FOMC monetary policy decision on Wednesday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart presents a neutral-to-bearish stance, as the price kept moving back and forth around a horizontal 20 SMA, while technical indicators turned south, but remain stuck around their mid-lines. The downside potential is being limited by dollar's self-weakness, although a downward acceleration through 0.7875 should result in additional declines, at least short term."