AUD/USD recovers early lost ground, back around mid-0.8000s

The AUD/USD pair managed to recover early lost ground and is currently placed at session tops, just above mid-0.8000s. 

The pair extended Friday's sharp pull-back from levels beyond the 0.8100 handle, the highest since mid-May 2015, and touched a session low level near the 0.8035-30 region during early Asian session.

With fears over the N. Korean episode easing a bit, a goodish US Dollar recovery, backed by a strong pickup in the US Treasury bond yields, had been a key factor weighing on higher-yielding currencies - like the Aussie. 

However, the Chinese inflation figures released over the weekend underpinned demand for the China-proxy Australian Dollar and helped limit further losses, at least for the time being. 

Adding to this, the prevalent positive trading sentiment around commodity space, especially copper, extended some additional support to commodity-linked currencies, including the Aussie. 

It, however, remains to be seen if the pair is able to gain any follow through traction or enters a consolidation phase ahead of this week's important macro releases, including Australian jobs report, Chinese data dump and US CPI/retail sales data.

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Technical levels to watch

Immediate resistance is pegged near 0.8065-70 zone, above which the pair is likely to aim back towards the 0.8100 handle en-route multi-month high level of 0.8125.

On the flip side, a follow through retracement below 0.8030-25 area is likely to extend the corrective slide towards the key 0.80 psychological mark before the pair eventually drops to test its next support near the 0.7985-80 region.