AUD/USD gains traction further beyond 0.81 handle ahead of ADP report

   •  Persistent USD selling offsets softer Aussie CPI print. 
   •  Sliding US bond yields provide an additional boost.
   •  ADP report eyed ahead of the key FOMC decision. 

The AUD/USD pair continued gaining some positive traction through the mid-European session and was now seen building on its momentum above the 0.8100 handle.

With investors looking past today's softer Aussie inflation figures, persistent US Dollar selling bias, further aggravated by a follow-through retracement in the US Treasury bond yields benefitted higher-yielding currencies - like the Aussie.

Adding to this, the prevailing bullish sentiment around commodity space, especially copper, provided an additional boost to the commodity-linked Australian Dollar and further collaborated to the pair's rally of over 50-pips from session lows.

It would now be interesting to see if bulls are able to maintain their dominant position or the bullish momentum once again fizzles out near the 0.8115-20 supply zone.

Next on tap would be the release of ADP report on the US private sector employment, which might provide some impetus but seems more likely to be overshadowed by pre-Fed repositioning trade.

Technical levels to watch

The 0.8120 region might continue to act as an immediate strong hurdle, above which a bout of short-covering should accelerate the up-move towards 0.8160-65 resistance en-route the 0.8200 handle. 

On the flip side, 0.8085 level now seems to protect the immediate downside, which if broken might now turn the pair vulnerable to break below 0.8050-40 support area and head towards testing the key 0.80 psychological mark.