AUD/USD runs into 1H 100-MA hurdle

• Aussie on recovery mode, but 1h 50-MA is playing spoilsport. 
• 10-year AU-US yield spread risks turning negative, could hurt the AUD. 

The bullish price-RSI divergence on 1-hour chart and the positive price action in the S&P 500 on Friday set the AUD/USD pair on a recovery mode, however, the uptick could turn out to be a dead cat bounce if US CPI beats estimates on Wednesday and the Aussie labor and wage growth numbers (due on Thursday) disappoint market expectations. 

As of writing, the currency pair is trading at 0.7830 levels, having clocked a high of 0.7835 and low of 0.7811 earlier today. The recovery from Friday's low of 0.7786 seems to have stalled around the 1-hour 100-MA level of 0.7833. 

Despite Friday's 1 percent rally in Dow, the Asian equities are only mildly bid. For instance, stocks in China are up 0.70 percent, while Australian shares are down 0.40 percent. Japanese equities are closed on account of the national holiday. The price in Asian stocks indicates the investors fear the relief rally in US stocks could be short-lived as fiscal expansion will likely make Fed balance sheet cut more impactful on yields. 

The caution in equities could be making it difficult for the Aussie to cut through the 1h 100-MA hurdle. Also, the 10-year Aussie bond yield offers only 2 basis points (bps) more than its US counterpart. The spread could turn negative (invert) for the first time since 1999 if US CPI shows rising cost pressures. A negative spread could push the Aussie dollar below the 200-day MA (currently seen at 0.7754). 

AUD/USD Technical Levels

 Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that the pair settled below the 50% retracement of the December/January rally around 0.7820, while technical readings keep favoring a downward continuation:

"The pair closed far below a bearish 20 SMA, while technical indicators holding near oversold readings, barely losing their downward strength. The quite straight slump from these last days, however, may favor an upward corrective movement ahead. In the 4 hours chart, a bearish 20 SMA attracted selling interest, while technical indicators corrected from oversold readings, but lack strength enough to confirm a steeper recovery ahead," Valeria added.