AUD/USD trapped near 0.76 as the Aussie takes a long weekend

• The Aussie starts off the new week on a muted note with Australian institutions taking a long weekend.
• China inflation figures for the weekend beat expectations, could provide support for further bullish moves as long as the week remains on-balance.

The AUD/USD is trading near 0.7600 as the new week opens on a quiet note with Australian markets shuttered for a holiday.

The Aussie looks set to trade lower against the US Dollar this week, with the pair trading down from a lower high set last week, and the long-term bearish trend is still in place despite a technical correction for the AUD/USD, which received brief support from an unexpected positive swing to Australian economic figures, though the trend is still far off from allowing the Reserve Bank of Australia (RBA) to begin even talk about lifting interest rates. 

Australia celebrates the Queen's Birthday today, and Aussie markets will be dark for Monday. Action for the early week will see limited volumes for the pair. Chinese inflation data came out over the weekend though, with China's Consumer Price Index printing at the expected 1.8%, in-line with the previous period, while the Producer Price Index came in at 4.1% for the y/y, over and above the forecasts of 3.9% and a beat of the previous reading of 3.4%. 

AUD/USD levels to watch

As noted by FXStreet's own Valeria Bednarik, "the AUD/USD pair has advanced up to the 61.8% retracement of its April/May slump at around 0.7655, before easing, indicating that the market may not be fully ready for a bullish breakout. Friday's decline, on the other hand, was contained by buyers around the 38.2% retracement of the same decline at 0.7565, now turned into a strong and immediate support for next week.

Technically, the weekly chart shows that after weeks of consolidation the pair decided to break higher, but also that the rally was rejected from a major resistance area, as around the highs and beyond the mentioned Fibonacci resistance, the pair has the 100 and 200 SMA. Technical indicators in the mentioned chart have recovered further but remain below their midlines and with the upward potential well-limited. In the daily chart, the upside was contained by a bearish 100 SMA but held above a mild bullish 20 SMA. Technical indicators in this last time frame have turned south, now resting above their midlines.

A break below 0.7565 will increase the downward potential of the pair, with 0.7470 being the next relevant support ahead of 0.7410, the low set last May. Resistances come at 0.7620 and the 0.7660 region, while beyond this last, there's room for a full 100% retracement up to 0.7810."