AUD/USD slides back closer to Friday’s near four-week lows

The AUD/USD pair extended weaker Chinese macro data-led reversal move and tumbled around 50-pips from multi-day tops, near the 0.7920 region touched earlier during the Asian session.

Currently placed at session lows, around the 0.7870 region, the pair has now reversed all of Friday's recovery gains led by softer US inflation figures and moved within striking distance of last week's near four-week lows. 

Today's disappointing Chinese economic data dump - Industrial Production, Fixed Asset Investment and Retail Sales data, triggered the pair's initial leg of retracement from session highs. This coupled with a softer tone around commodity space, especially copper, further dented demand for commodity-linked currencies, including the Australian Dollar. 

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Meanwhile, a strong pickup in the US Treasury bond yields, which underpinned the US Dollar demand, has also been one of the key factors weighing on higher-yielding currencies and collaborated to the pair's downslide through early European trading session. 

With an empty US economic docket, the US bond yield dynamics would continue to be a key determinant of the pair's movement ahead of Tuesday's RBA monetary policy meeting minutes and the US monthly retail sales data.

Technical levels to watch

A follow through selling pressure has the potential to drag the pair even below Friday's swing low support near mid-0.7800s towards 0.7825 intermediate support en-route the 0.7800 handle. On the upside, the 0.7895-0.7900 region now seems to act as an immediate hurdle, above which a bout of short-covering could lift the pair towards 0.7955 resistance ahead of the key 0.80 psychological mark.