AUD/USD struggles near 1-1/2 week lows, just above 0.78 handle

The AUD/USD pair stalled its tepid recovery move near 0.7835 level and has now moved back closer to 1-1/2 week lows touched earlier during Asian session.

A goodish pickup in the US Treasury bond yields remained supportive of a strong follow through US Dollar buying interest and kept a lid on initial recovery move for higher-yielding currencies - like the Aussie. 

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Meanwhile, today's release of house prices data from China, showing a 6.3% rise in September as compared to previous month's 8.3% strong gain, was also seen weighing on the China-proxy Australian Dollar. 

Despite of a good two-way move, the pair lacked any firm directional bias as investors seemed refraining from placing aggressive bets ahead of this week's key Australian CPI print on Wednesday and Friday's Q3 US GDP figures. 

Meanwhile, reemergence of selling pressure at higher level clearly seems to suggest that the pair's near-term downward trajectory might still be far from over. 

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With an empty US economic docket, the pair remains at the mercy of US bond yield dynamics and a follow through weakness, amid prevalent bullish sentiment around the greenback, now seems a distinct possibility. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "Exhaustion near the 0.79 handle last week, followed by a close below the 100-DMA does indicate the potential for a drop to the head-and-shoulders neckline support of 0.7715. However, the 100-DMA is still sloping upwards and the 200-DMA support is lined up at 0.7690. It would take a horribly weak Aussie CPI to push the AUD below the 0.77 handle."