“¢ A modest USD retracement helps ease the bearish pressure.
“¢ Weaker commodities do little to lend any support to the Aussie.
“¢ Surging US bond yields to further collaborate towards capping gains.
The AUD/USD pair remained heavily offered tone through the mid-European session, albeit has managed to rebound around 20-pips from 32-month lows touched earlier today.
The pair extended this week’s retracement slide from the 0.7235-40 supply zone and kept losing ground for the third consecutive session on Thursday. The pair pierced through the 0.7100 handle and dropped to an intraday low level of 0.7066, the lowest since mid-Feb. 2016.
The pair stalled its bearish slide and was being supported by a modest US Dollar retracement, despite a strong follow-through upsurge in the US Treasury bond yields. After yesterday’s strong upsurge, triggered by upbeat US economic data, the USD bulls took a breather and turned out to be one of the key factors helping to ease the bearish pressure, at least for the time being.
The uptick, however, seemed lacking conviction/strong follow-through amid a weaker tone surrounding commodity space, especially copper, which was seen underpinning demand for the commodity-linked Australian Dollar.
In absence of any major market-moving economic data, the pair remains at the mercy of broader market risk-sentiment and the USD price dynamics ahead of Aussie monthly retails sales data, scheduled during the Asian session on Friday.
Technical levels to watch
The 0.7100 handle now becomes immediate resistance, above which the recovery momentum could further get extended towards the 0.7145-50 supply zone. On the flip side, any follow-through selling has the potential to continue dragging the pair further towards 0.7030 intermediate support en-route the key 0.7000 psychological mark.
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