AUD/USD trims early gains, retreats back to 0.7700 handle

   •  Stability in US bond yields prompting some profit-taking.
   •  Weaker commodity prices add to the selling pressure. 
   •  Second-tier US economic data eyed ahead of Fed Chair announcement. 

The AUD/USD pair trimmed some of its early strong gains to over 1-week high and retreated around 25-30 pips from session tops touched earlier.

The market now seems to have digested today's upbeat Australian macro data, with some signs of stability in the US Treasury bond yields driving flows away from higher-yielding currencies - like the Aussie.

Adding to this, a sharp retracement in commodity prices, especially copper, was also seen weighing on the commodity-linked currencies and further collaborated to the pair retracement back to the very important 200-day SMA, around the 0.7695-0.7700 region. 

Next in tap would be the release of second-tier US economic data, but the key focus would remain on the US President Donald Trump's announcement of the next Fed Chair and introduction of the long-awaited tax-cut legislation. 

   •  US: Focus in Fed chair announcement – Danske Bank

Technical levels to watch

Immediate support is pegged near 0.7680-75 zone, below which the pair is likely to slide back towards 0.7655 strong horizontal support. A follow-through selling pressure might turn the pair vulnerable to accelerate the fall towards 0.7625 (3-1/2 month lows) ahead of the 0.7600 handle.

On the upside, 0.7720-30 area might continue to act as an immediate hurdle, which if cleared seems to extend the up-move towards 0.7750-55 horizontal resistance before the pair eventually aims towards reclaiming the 0.7800 handle.