AUD/USD tumbles to lows near 0.7520 in pre-Trump trade

Having spiked to over two-month high, the AUD/USD pair witnessed a sharp reversal and tumbled around 70-pips from session peak. 

Currently trading around 0.7525 region, a fresh leg of up-surge in the US treasury bond yields lifted the US Dollar across the board and is weighing heavily on higher-yielding currencies - like the Aussie. Investors seemed to lighten their positions and preferred to lock-in some profits following the pair's sharp recovery move since the beginning of this year.

Adding to this, weaker sentiment surrounding commodity space, especially Copper, is also denting demand for commodity-linked currencies and collaborating the pair's sharp reversal from the highest level since Nov. 11.

Moreover, repositioning and short-dollar unwinding trade also seems to have kicked-in ahead of the key event risk, Trump's inaugural speech, further aggravated the selling pressure around the major. Investors' attention will remained glued to comments on Trump's promised fiscal stimulus policies and possible remarks on the strength in the US Dollar, which would provide fresh impetus for the pair's next leg of directional move. 

Technical levels to watch

A follow through retracement is likely to find support at the very important 200-day SMA, which if broken is likely to accelerate the slide towards 0.7475 horizontal level before the pair eventually drops to 0.7450 support. On the upside, 0.7565 region now becomes immediate strong resistance and only a decisive move above this hurdle would pave way for continuation of the pair's near-term upward trajectory, initially towards 0.7600 handle and eventually towards its next major resistance near 0.7650 level