AUD/USD jumps to session tops, 0.77 mark still seems elusive

   •  RBA meeting minutes fails to provide fresh bullish impetus.
   •  An uptick in US bond yields & weaker copper prices further capping upside.
   •  US tax bill progress holds the key; US data eyed for trading impetus. 

The AUD/USD pair quickly reversed its Asian session dip to the 0.7655 region and is currently placed near session tops. 

The pair initially struggled to gain traction after the RBA's December meeting minutes reiterated that an appreciating exchange rate would pose a significant risk to expected pickup in inflation and the economy. 

However, persistent US Dollar weakness, despite optimism over the passage of a long-awaited US tax reform legislation, helped limit further downside. 

The USD weakness, to some extent, seems to have been negated by a modest uptick in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.

This coupled with weaker trading sentiment around commodity space, especially copper, also did little to lend any support to the commodity-linked currency and might now contribute towards keeping a lid on any further up-move. 

Hence, it would be prudent to wait for a strong follow-through buying interest, beyond the very important 200-day SMA barrier near the 0.7700 handle, before positioning for any additional near-term appreciating move.

Later during the early NA session, the US housing market data would now be looked upon for some short-term trading impetus. The key focus, however, would remain on a possible Senate vote on a sweeping US tax overhaul legislation.

Technical outlook

"Short-term, and according to the 4 hours chart, the pair has been bouncing repeatedly from a still bullish 20 SMA, while technical indicators lost directional strength, with the Momentum stuck around its 100 line, and the RSI around 62" writes Valeria Bednarik, American Chief Analyst at FXStreet.

She further added, "the 0.7700 figure is a critical resistance level, with a break above it opening doors for a continued advance during the upcoming sessions toward the 0.7770 region."