AUD/USD pares early losses, trades modestly higher near 0.7420

• AUD/USD is staging a decisive rebound in early American session.
• US Dollar Index fails to hold above 91.00.
• Consumer Credit Change will be the only data from the US.

The AUD/USD pair fell to a daily low of 0.7372 during the European trading hours on Monday but didn't have a difficult time erasing its losses. As of writing, the pair was posting small daily gains at 0.7424.

DXY rebound loses strength

The USD's market valuation remains the primary driver of AUD/USD's movements at the start of the week. The US Dollar Index (DXY), which dropped more than 1% last week, rose to a daily high of 91.23 as the renewed no-deal Brexit concerns triggered a flight to safety.

However, the DXY failed to preserve its bullish momentum and reversed its direction in the early trading hours of the American session. In the absence of significant fundamental drivers, a 2.7% decline witnessed in the 10-year US Treasury bond yield seems to have started to weigh on the USD.

Later in the session, the Federal Reserve will release the October Consumer Credit Change data. On Tuesday, the National Australia Bank's Business Confidence and third-quarter House Price Index will be featured in the Australian economic docket.

On Monday, the data from China showed that the country's trade surplus widened to $75.42 billion in November from $58.44 billion in October but failed to help the China-proxy AUD to begin the week on a strong footing.

Technical levels to watch for