AUD/USD: heavy, manages to hold above 0.7700

• Bulls attempting a tepid recovery, will it last?
• Aus-US yield differential points to further downside.

The AUD bulls are seen trying hard to defend the 0.77 handle so far this Friday, now keeping the AUD/USD pair few pips above the eight-day lows of 0.7706.

The spot entered a phase of bearish consolidation over the last hours, as the rally in Treasury yields across the curve lost steam, with the USD index now flirting with daily lows of 89.65.

However, the Aussie remains exposed to further downside risks as the widening US-Aus 10-year yield differential will continue to remain supportive of the US dollar while downbeat Australian employment data also adds to the bearish pressure on the pair.

The pair will continue to track the Treasury yields price-action for further momentum, as the focus shifts towards Australian inflation report for a fresh take on the Reserve Bank of Australia’s (RBA) next policy move.

AUD/USD levels to watch

The pair finds the immediate support at 0.7650 (Apr 9 low), below which floors open up for a test of the 0.7600 levels. A break below the last, multi-month lows of 0.7501 will remain on sight. To the topside, 0.7770 (Apr 10 tops), 0.7800 (round number) and 0.7813 (five-week highs) resistances will come in play.