“¢ Resurgent USD demand keeps a lid on any attempted recovery move.
“¢ Bullish copper prices underpinning Aussie and limiting immediate downside.
The AUD/USD pair continued with its struggle to make it through the 0.7100 handle and quickly retreated back to the lower end of its daily trading range.
The pair struggled to build on overnight late rebound from 1-1/2 week, with resurgent USD demand keeping a lid on any meaningful up-move. Despite a negative tone around the US Treasury bond yields, the US Dollar rallied back closer to yearly tops and was seen prompting some fresh selling on every attempted rebound to the 0.7100 handle.
The downside, however, remained limited, at least for the time being, and was cushioned by the prevalent positive tone around copper prices, which tend to underpin demand for commodity-linked currencies, including the Australian Dollar.
Meanwhile, persistent worries about a further escalation of US-China trade tensions, which had been one of the key factors weighing on the China-proxy Aussie over the past few months, might keep a lid on any meaningful recovery move.
Moreover, the recent price action further seems to indicate that the near-term selling bias might be still far from over and hence, resumption of the well-established bearish trend, led by some fresh technical selling, remains a distinct possibility.
Technical levels to watch
The 0.7050-40 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the fall further towards testing the key 0.7000 psychological mark. On the flip side, the 0.7100-0.7110 region now seems to have emerged as an immediate hurdle, above which the pair is likely to aim towards retesting the 0.7150-60 heavy supply zone.