AUD/USD flirting with 2-week lows, around 0.7170 level

   “¢   Disappointing Aussie building permits prompts some fresh selling.
   “¢   Fresh USD selling/positive commodities fail to provide any boost.
   “¢   Traders now eye US economic data for some short-term impetus.

The AUD/USD pair struggled to register any meaningful recovery and remained within striking distance of two-week lows, set in the previous session.

After yesterday’s late rebound, the pair met with some fresh supply during the Asian session on Wednesday after the Australian building permits missed market expectations by a big margin. In fact, building permits fell 9.4% m/m in July, as compared to a rise of 1% anticipated, and exerted some downward pressure on the domestic currency.

However, a combination of positive forces, though failed to provide any meaningful boost, helped limit deeper losses, at least for the time being. The prevalent positive tone around commodity space, especially copper, underpinned demand for commodity-linked currencies, including the Aussie.  

Meanwhile, the US Dollar failed to capitalize on the overnight strong upsurge and seemed largely unaffected by a goodish pickup in the US Treasury bond yields, and turned out to be one of the additional factors extending some support to the major.  

Despite supporting factors, the pair struggled to gain any traction and the price action clearly indicates that the near-term bearish pressure might still be far from over. Hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility.

Moving ahead, today’s US economic docket, featuring the release of ADP report on private sector employment and ISM non-manufacturing PMI, will now be looked upon for some fresh impetus later during the early North-American session.

Technical levels to watch

Immediate support is pegged near the 0.7140 region, below which the pair is likely to accelerate the slide further towards the 0.7100 handle. On the flip side, the 0.7200 handle now seems to have emerged as an immediate hurdle, above which a bout of short-covering could lift the pair further towards the 0.7230-40 supply zone.