AUD/USD bulls eyeing to reclaim 0.77 handle amid subdued trading action

   •  Trying to build on overnight recovery from YTD lows.
   •  Lacks strong conviction amid holiday-thinned liquidity. 

The AUD/USD pair traded with a mild positive bias through the Asian session on Friday but lacked any strong follow-through amid holiday-thinned trading conditions.

The pair on Thursday bounced back from fresh YTD lows and jumped back closer to the 0.7700 handle amid subdued US Dollar demand. This coupled with a sharp retracement in the US Treasury bond yields, which tends to drive flows towards higher-yielding currencies, further collaborated to the pair's modest rebound from the lowest level since Dec. 18th.

The up-move, possibly triggered by some short-covering ahead of an extended weekend, seemed lacking conviction and hence, it would be prudent to wait for a subsequent recovery before confirming that the pair might have bottomed out in the near-term. 

With global markets shut today for Good Friday, the pair seems more likely to extend its consolidative price action and wait for next week's RBA decision for a fresh directional impetus.

Technical levels to watch

On a sustained recovery beyond the 0.7700 handle, a fresh bout of short-covering could lift the pair back towards the 0.7745-50 supply zone. On the flip side, 0.7665-60 area is likely to protect the immediate downside, which if broken might turn the pair vulnerable to extend its downward trajectory towards testing the 0.7600 handle.