AUD/USD recovers modestly, trades near mid-0.79s

DXY recovery loses momentum in the NA session.
AUD/USD trades in a 40-pip range.
Home loans data from Australia coming up next.

After dropping to a fresh session low at 0.7937, the AUD/USD pair started to retrace its daily losses and was last seen trading at 0.7955, where it was down only 10 pips on the day.

The pair on Tuesday came under a bearish pressure with the greenback finally gathering some strength against its rivals. After recording heavy losses in the last four trading days, the US Dollar Index is looking to close the day higher on Tuesday. Today's technical recovery lifted the DXY to a daily high at 90.58 earlier in the session. However, with the 10-year US T-bond yields remaining in the negative territory, the index struggled to extend its gains and was last seen at 90.40, where it was up 0.3% on a daily basis.

There won't be any macroeconomic data releases from the U.S. in the remainder of the session and investors will look upon the home loans data from Australia, which is expected to improve to -0.2% from -0.6% in November. Although a positive reading is likely to help the AUD gain traction, the pair could find it tough to stretch higher with technical indicators continue to show overbought conditions.

Technical levels to consider

The initial support for the pair is located at 0.7905/0.7900 (Jan. 15 low/psychological level) ahead of 0.7835 (20-DMA) and 0.7760 (200-DMA). On the upside, resistances could be seen at 0.8000 (psychological level), 0.8090 (Sep. 20 high) and 0.8125 (Sep. 8 high).

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