AUD/USD recovers early lost ground to 11-month lows, US PPI eyed

   •  A modest USD retracement from YTD tops prompt some short-covering move.
   •  Traders seemed to have largely negated a strong uptick in the US bond yields.
   •  US PPI eyed for some impetus ahead of Chinese inflation figures on Thursday.

The AUD/USD pair has managed to recover majority of its early lost ground and rebounded around 30-35 pips from fresh 11-month lows touched today.

The pair stalled its bearish trajectory and now seems to have found some support ahead of the 0.7400 handle amid a modest retracement witnessed around the US Dollar, which prompted some short-covering move from near-term oversold conditions. 

The greenback failed to build on/preserve its strong gains to fresh YTD tops and seems to have largely negated a strong pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.

Meanwhile, a mildly negative trading sentiment around commodity space, especially copper, did little to provide any additional boost to the commodity-linked Australian Dollar, with the USD price dynamics acting as an exclusive driver of the pair's uptick since the early European session.

Next in focus would be the US economic docket, featuring the release of Producer Price Index (PPI) for April, might provide some short-term trading impetus ahead of Thursday's Chinese inflation figures. 

Technical levels to watch

Any subsequent recovery move is likely to confront immediate resistance near the 0.7470-75 region, above which the pair is likely to surpass the key 0.75 psychological mark and head towards testing the 0.7530-35 supply zone.

On the flip side, the 0.7410-0.7400 area might continue to protect the immediate downside, which if broken is likely to accelerate the fall further towards 0.7370 level en-route the next major support near the 0.7330-25 region.