AUD/USD consolidates the recovery near 0.7575

• 0.7500 still on sight, despite the tepid recovery.
• Falling China stocks dampen the sentiment around the Aussie.

The overnight recovery in the AUD/USD pair lost legs below the 0.76 handle, as the bulls lack vigor amid tepid sentiment seen across the Chinese stock markets.

China stocks tumbled, with the Shanghai Composite Index down nearly 1.50%, as the US-China trade war fears resurfaced, which in turn undermines the sentiment around the higher-yielding currency, the AUD.

Moreover, with the 10-year Treasury yields sitting at four-year tops, markets expect the greenback to jumpstart its ongoing rally. Thus, keeping the bulls on a cautious footing ahead of the US durable goods and jobless claims data.

Meanwhile, upbeat Australian import prices data continue to keep the buoyant tone intact around the Aussie.

AUD/USD levels to watch

Commerzbank’s Analyst, Karen Jones notes: “AUD/USD is under pressure following the erosion of the 2016-2018 uptrend. The failure here targets the .7501 December 2017 low initially and ultimately the 2001-2018 uptrend at .7142. Initial support is the base of the channel at .7541 and we notice the TD support at circa .7538. It is possible that we will see this hold the initial test and we will attempt to sell a rally. The market recently saw a complete rejection of its 200-day ma at .7812 last week. This resistance is reinforced by the top of the channel at .7796 and the 38.2% retracement at .7831, all of which suggests that the market has topped at .7813.”