AUD/USD flirting with support near mid-0.7600s, remains vulnerable

   •  Faces rejection near 0.7700 handle on news of a possible Yuan devaluation.
   •  A modest USD uptick/pickup in the US bond yields add to the downward pressure.
   •  Technically seems poised to extend the near-term bearish trajectory.

The AUD/USD pair extended its rejection slide from the 0.7700 handle and refreshed session lows in the past hour.

After an initial uptick, the pair met with some fresh supply and turned lower for the third consecutive session on news that China is studying the impact of gradual Yuan devaluation to counter the US-China trade disputes.

This coupled with reviving US Dollar demand, backed by a goodish pickup in the US Treasury bond yields exerted some additional downward pressure on higher-yielding currencies - like the Aussie and further collaborated to the pair's offered tone through the mid-European session.

Looking at the broader picture, the pair's inability to register any meaningful recovery beyond the 0.7700 handle clearly seems to suggest that the near-term downward trajectory might still be far from over. Hence, a follow-through weakness, led by some fresh technical selling below 0.7650 region, now looks a distinct possibility.

In absence of any major market moving economic releases from the US, the USD/US bond yield dynamics might continue to act as key determinants of the pair's momentum on the first trading day of a new week. 

Technical levels to watch

Below the mentioned support, near the 0.7650-40 area, the pair is likely to accelerate the downfall towards testing the 0.7600 handle. On the upside, the 0.7700 handle now seems to have emerged as an immediate resistance, above which a bout of short-covering could lift the pair beyond the 0.7720 intermediate resistance towards its next major support zone near the 0.7745-50 region.