AUD/USD slides to 0.6820 horizontal support

• AUD/USD remains on the defensive amid persistent US-China trade uncertainty.
• The USD fails to capitalize on the post-NFP positive move and might lend support.
• The market focus now shifts to the latest FOMC policy update, due later this week.

The AUD/USD pair refreshed daily lows during the early European session on Monday and is currently placed near the 0.6820 horizontal support.

The pair failed to capitalize on its early uptick, rather met with some fresh supply and extended Friday's post-NFP pullback from the 0.6855-60 supply zone. It is worth recalling that the latest US monthly employment details showed that employers added 266K jobs in November and unemployment rate unexpectedly dipped to 3.5%, which provided a goodish lift to the US dollar and exerted some pressure on the major.

Weighed down by trade uncertainty

The USD struggled to build on the previous session's positive momentum, albeit persistent uncertainty over phase one US-China trade deal turned out to be one of the key factors weighing on the China-proxy Australian dollar. In the latest development, top White House Economic Adviser Larry Kudlow confirmed on Friday that the December 15 deadline to impose the new tariffs on Chinese products remains in place.

Despite the pullback, the pair remains well within a familiar trading range held over the past four trading sessions. Hence, it will be prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move amid absent relevant market-moving economic releases on Monday. Meanwhile, the key focus will remain on the latest FOMC monetary policy update, due later this week.

Technical levels to watch

AUD/USD