AUD/USD surges to 2-week tops, inching closer to mid-0.7700s

   •  Build on overnight rebound amid easing US-China trade war fears.
   •  Traders shrugged off a modest USD uptick/pickup in the US bond yields.

The AUD/USD pair built on previous session's goodish rebound and surged through the 0.7700 handle, 2-week tops during the early European session.

The US Dollar lost some more ground on and helped the pair to bounce off its immediate strong support near mid-0.7700s. The recovery move got an additional boost after comments by Chinese President Xi Jinping, promising to lower import tariffs on products including cars, eased concerns over an escalating US-China trade dispute and boosted demand for the China-proxy Australian Dollar. 

Meanwhile, investors seemed to have fully digested today's disappointing Australian release of NAB business condition/ confidence surveys and also shrugged off a modest pickup in the US Dollar demand.

It would now be interesting to see if bulls are able to build on the momentum or the pair once again struggles to break through the 0.7745-50 supply zone amid a follow-through upsurge in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie. 

Traders now look forward to the US economic docket, featuring the release of PPI figures, due later during the early NA session, for some fresh trading impetus. The key focus, however, would be on Wednesday's consumer inflation figures and the latest FOMC meeting minutes, which might help provide some fresh directional impetus.

Technical levels to watch

Bulls would be eyeing for a sustained move beyond the 0.7745-50 immediate resistance, above which the pair to aim towards retesting the very important 200-day SMA hurdle, currently near the 0.7810 region, with 100-day SMA, near the 0.7780 area, acting as an intermediate barrier. 

On the flip side, 0.7725-20 area might now act as an immediate support, which if broken might prompt some additional weakness back below the 0.7700 handle towards retesting the 0.7660-50 strong support area.